Markets slide as tech slowdown fears mount
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Reuters
A sell-off continued on Wall Street on Tuesday led by Apple and retailers, with the S&P 500 falling into negative territory for the year to date.
The Dow Jones Industrial Average shed more than 500 points, with the broader S&P and Nasdaq indexes also down about 2%.
Apple fell another 4% to $178, down from a record high of $223 and four months after its value hit $1 trillion.
The FTSE 100 fell more than 1% and oil prices also tumbled on Tuesday.
Brent crude sunk $3 to $63.77 a barrel – the lowest level since March.
Connor Campbell at Spreadex described the sell-off as a “macro-car crash, with Brexit fears, the post-APEC pre-G20 US-China trade war flare-up and the continuation of a nasty US tech sell-off resulting in absolute carnage”.
Analysts at Goldman Sachs Sachs cut their price target on Apple from $209 to $182, blaming very weak demand from Chinese in the late summer and a stronger US dollar.
“Investors are concerned that sooner rather than later the tech sector is going to be fully embroiled in the US-China trade battle, exacerbating the softness caused by reports of a slowdown in iPhone demand,” Mr Campbell added.
Retailers were punished for weak results and forecasts, with shares in Target sinking 10%, while Kohl’s tumbled 9% and Walmart was dragged 3% lower.
Michael O’Rouke at Jonestrading said retailers as well as big technology firms such as Amazon and Facebook had pushed the market higher for most of this year.
“Now that’s fading, so people are more apt to take profit and de-risk going into the year-end. There are the headwinds of the trade war out there. The fiscal stimulus from tax cuts is starting to fade … we don’t have many positive catalysts,” he said.
Hans Redeker at Morgan Stanley commented: “For the US equity market to stabilise, either the rest of the world will have to show better growth or the Fed will have to moderate its stance.”
Frankfurt and Paris fell 1.5% and 1.2%, with Deutsche Bank down 4% hitting a new record low.
