U.S. stocks snapped after a drop in Apple shares following a forecast that dampened the optimism regarding trade talks between U.S. and China.
The shares of Apple Inc tumbled 6.6% and its market value fell below $1 trillion. This was following warning by the iPhone maker that the crucial holiday quarter sales may not meet the estimated expectations. In August, Apple became the first U.S. company that was publicly listed with the market value of $1 trillion.
Due to the disappointing forecast, the shares of Apple’s suppliers in U.S. fell. According to the chief investment officer of North Star Investment Management Corp in Chicago, the earnings of Apple set the tone which has been a headwind throughout the day.
The comments about the trade talks between U.S and China by Larry Kudlow, the economic adviser of White House, also couldn’t cheer up the mood. This month the President is scheduled to meet Chinese President Xi Jinping, but there are no proposed trade plans being made yet. There were rumors about trade dispute resolution that buoyed hopes. Stocks extended losses after Kudlow’s comments. S&P 500 industrial index ad SPLRCI closed down 0.3%.
Michael Matousek, U.S. Global Investors Inc’s head trade, said that tariffs play a major role in the investment decision and this is visible from recent scenario.
The Dow Jones Industrial Average .DJI fell 109.91 points, or 0.43 percent, to 25,270.83, the S&P 500 .SPX lost 17.31 points, or 0.63 percent, to 2,723.06, and the Nasdaq Composite .IXIC dropped 77.06 points, or 1.04 percent, to 7,356.99.
The payrolls report of Labor Department shows that job growth has shown a rebound last month that pints to a further tightening of the labor market which could further encourage the Federal Reserve for raising benchmark rate of interest in December.
Source: Reuters, Money Control