US stocks tumble on Apple, manufacturing data

Apple said iPhone sales in China would be lower than forecast due to steeper than expected "economic deleration" (AFP Photo)
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Wall Street was heading for another rout early Thursday following a gloomy forecast from Apple and weak US manufacturing data.

Near 1520 GMT, the Dow Jones Industrial Average was down 2.4 percent, more than 550 points, at 22,782.83.

The broad-based S&P 500 slumped 2.1 percent to 2,457.14, while the tech-rich Nasdaq Composite Index tumbled 2.6 percent to 6,493.07.

The bruising losses were a resumption of the trend that held for much of December, the worst month for equities in nearly a decade, amid worries over trade wars, Federal Reserve interest rate hikes and a US government shutdown.

Shares in Apple slid nine percent after it announced late Wednesday that it was trimming its sales forecast for the most recent quarter, citing steeper-than-expected “economic deceleration” in China amid the US-China trade war.

Apple weighed on stocks when the market opened at 1430 GMT but equities fell further after the Institute for Supply Management a half hour later released data that showed weaker-than-expected manufacturing activity, with new orders plummeting in December.

The manufacturing data overshadowed the earlier ADP employment report, which showed private-sector firms had added 271,000 jobs in December, well above analyst forecasts.

The data came ahead of Friday’s more closely-watched Department of Labor report. Analysts expect the US added 180,000 jobs last month and unemployment held at 3.7 percent.

Drug company Celgene surged 26.3 percent after it reached a deal to be bought by the larger pharma company Bristol-Myers Squibb for $74 billion. Bristol-Myers fell 13.6 percent.

Airline shares slumped after Delta Air Lines trimmed its revenue forecast, describing customer demand in late December as “more modest than anticipated.”

Delta plunged 8.9 percent, United Continental 6.0 percent and American Airlines 9.7 percent.

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