Stocks tumble after Apple's warning leave investors jittery
/ CBS/AP
Shares suffered another sharp decline after Apple cut its revenue forecast, blaming lackluster sales in China during the holiday quarter.
The Dow dropped 335 points, or 1.4 percent, to 23,011 in early trading. The tech-heavy Nasdaq also shed 1.4 percent, while the S&P 500 slipped 0.7 percent.
Apple shares tumbled 9 percent.
In a letter released to shareholders after the close of trading on Wednesday, Apple CEO Tim Cook slashed the tech giant's revenue forecasts for the October-December quarter, blaming a slowdown in sales of iPhones and other Apple devices in China. The disclosure was a "a bombshell negative pre-announcement" that pointed to far bigger problems at the tech company than many investors had feared, noted Wedbush analyst Dan Ives in a research note.
"Although the company had some quarters over the past 20 years that missed Street expectations, in the modern iPhone era last night was clearly Apple's darkest day in our opinion and represents a challenging growth period ahead for the company (and its investors)," Ives wrote.
The tech giant said revenue for its fiscal first quarter, which ended Dec. 29, will be about $84 billion, falling short of an average analyst estimate of $91.5 billion. Apple shares slid 7.2 percent in after-hours trading as investors digested the revenue warning, a rarity from a tech giant that until recently has been a Wall Street favorite.
The official results will be released on Jan. 29.
China's issues
Cook attributed most of the revenue drop to China, where the economy has been slowing and where U.S. tariffs have been raised on more than $200 billion in goods, although the iPhone hasn't been affected directly so far. The company's shares fell 7.6 percent to $146 in after-hours trading. Cook's letter added to worries about slowing growth in the world's second largest economy.
"Doubling down on Asia markets for a second day today would be the latest downward revision in Q1 guidance from tech giant, Apple," Jingyi Pan of IG said in a market commentary. "The already shaky foundation for Apple owing to the likelihood of the company's products being enlisted into the tariffs scuffle saw their latest move to lower revenue outlook packing a punch for share prices."
Worst December
So far, 2019 hasn't had an auspicious start for investors. The Dow eked out a small gain on Wednesday, the first trading day of the year, after a volatile session, followed by Thursday's sharp decline.
That comes on the heels of a tough December, with Bank of America Merrill Lynch noting that the S&P 500 "posted its worst monthly total return since the financial crisis," with a decline of 9 percent.
"And 2018 marked the first negative total return year for the S&P since the financial crisis (-4.4 percent), ending the nine consecutive years of positive returns which tied the longest streak in history since 1936 (1991-99)," the investment firm noted in a research note.
First published on January 3, 2019
© 2019 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
Stocks tumble after Apple's warning leave investors jittery
Apple pointed to China's economic slowdown as a cause of its shortfall, adding to fears about a global economic hit
updated 2M ago 
New Congress seated: Democratic members sworn in, Pelosi to be elected speaker — live updates
Democrats are taking the majority in the House of Representatives after eight years out of power
updated 2M ago 
Does artificial intelligence put our power grid at risk?
"There's more risk than we have ever had before," says cybersecurity expert Rob Lee
updated 54M ago 
Tesla's price cuts could signal waning demand
The electric-car maker said it moved to help offset a shrinking tax credit, but analysts see an inventory problem
1H ago 
Senate confirms dozens of Trump nominees ahead of new Congress
The Senate confirmed dozens of Trump nominees by voice vote Wednesday evening
1H ago 
New Congress seated: Democratic members sworn in, Pelosi to be elected speaker — live updates
Democrats are taking the majority in the House of Representatives after eight years out of power
updated 2M ago
Senate confirms dozens of Trump nominees ahead of new Congress
The Senate confirmed dozens of Trump nominees by voice vote Wednesday evening
1H ago 
Democrats agreed to a border fence in 2006 – is Trump’s wall different?
The Secure Fence Act was signed in 2006 by President Bush and supported by 90 Democratic members of Congress
1H ago 
Nancy Pelosi says a sitting president can be indicted
Incoming House speaker also says she is not ruling out the possibility of impeaching President Trump
updated 14M ago 
Federal workers won't see a check for weeks
As shutdown continues, it will be weeks before hundreds of thousands of government employees see a paycheck
updated 35M ago 
Rescued baby boy recovering after Russia collapse kills 39 others
Hundreds of rescuers complete sweep of concrete rubble of building that partially collapsed in the city of Magnitogorsk
updated 6M ago 
Sailor's yacht found 8 years after her ill-fated round-the-world bid
Abby Sunderland, who tried to circle the globe alone at just 16, says her "heart skipped a beat" at news her boat was found
updated 32M ago 
Saudi prosecutors to seek death penalties in Khashoggi murder case
Islamic kingdom's courts are closed, but government lawyers say all 11 people ID'd as suspects in journalist's death were at the first hearing
2H ago 
U.S. Ambassador meets with American detained in Russia
Russian police detained Paul Whelan, who now faces espionage charges, nearly a week ago
1H ago 
North Korean diplomat reportedly goes into hiding in Italy
South Korean lawmaker says intel services have determined acting ambassador Jo Song Gil is likely the latest high-profile North Korean defector
updated 45M ago 
"Bird Box" Challenge: Blindfolded copycats post risky stunts inspired by film
Netflix is warning fans about the risks of a new social media challenge inspired by its film, "Bird Box"
1H ago 
Coachella 2019 headliners include Ariana Grande, Childish Gambino
Just-announced lineup also includes Tame Impala, Janelle Monae, DJ Snake, Diplo, Solange and Weezer
5H ago 
Daryl Dragon, "Captain" of The Captain and Tennille, dies at 76
"Love Will Keep Us Together," the title track from his debut album with his then-wife, Toni Tennille, reached the top of the Billboard chart in July 1975
updated 52M ago 
How to watch the 2019 Golden Globe Awards
Hollywood's 2019 awards season kicks off Sunday night with the 76th annual Golden Globes
18H ago 
Bob Einstein, "Curb Your Enthusiasm" actor, dead at 76
Einstein was also known for his stuntman character, Super Dave Osborne
18H ago 
Does artificial intelligence put our power grid at risk?
"There's more risk than we have ever had before," says cybersecurity expert Rob Lee
updated 54M ago 
Earthquake warning app, first of its kind, being offered in L.A.
ShakeAlertLA works on Android and iPhones in Los Angeles County and is designed to give residents precious seconds to take precautions
5H ago 
Chinese spacecraft landed on the far side of the moon
The unmanned spacecraft, the Chang'e 4, touched down at 10:26 a.m., China Central Television said in a brief announcement
2H ago 
Queen rocker turned astrophysicist writes tribute to New Horizons mission
Brian May, co-founder of the band Queen, is now part of the New Horizons team
14H ago 
New images reveal most distant space debris ever seen
The latest images from NASA's New Horizons probe reveal "the most primitive object that has yet been seen by any spacecraft"
15H ago 
The best overall diets for 2019
If getting healthy is one of your New Year's resolutions, check out this ranking of the top overall diets for 2019
16H ago 
Big Pharma raises prices of more than 1,000 drugs
Consumers may have to pay more for a range of medications in 2019 as drugmakers boost their costs
15H ago 
Another blood pressure drug recalled
The concern involves trace amounts of a cancer-causing chemical
2H ago 
Fire chief's approach to opioid crisis has big impact
We're kicking off our new TED Talks partnership with Jan Rader, who's hailed for her efforts in Huntington, West Virginia
21H ago 
Nurses help "anxious" new parents at home, and program pays off
For every dollar spent on the program, an estimated $3 in health care costs are saved
16H ago 
Stocks tumble after Apple's warning leave investors jittery
Apple pointed to China's economic slowdown as a cause of its shortfall, adding to fears about a global economic hit
updated 2M ago
Tesla's price cuts could signal waning demand
The electric-car maker said it moved to help offset a shrinking tax credit, but analysts see an inventory problem
1H ago 
Bristol-Myers Squibb buying Celgene in $74 billion deal
The combined company will have nine products with more than $1 billion each in annual sales
1H ago
Federal workers won't see a check for weeks
As shutdown continues, it will be weeks before hundreds of thousands of government employees see a paycheck
updated 35M ago 
Lord & Taylor shuts flagship store on Fifth Avenue
While 45 other Lord & Taylors will stay open, the retailer's famous Manhattan building has been sold to WeWork
16H ago 
Boy charged with murder after egg prank leads to woman's death
Harris County Sheriff's Office says SUV was filled with teens who were throwing eggs at other cars when another driver began chasing them
1H ago 
LAPD arrest man who allegedly stole millions from celebrities
Police are calling it one of the most brazen and sophisticated string of burglaries they've ever seen
2H ago 
Driver of bus that flipped over, injuring 22, charged with DUI
Greyhound bus overturned on entrance ramp to interstate in Mississippi
3H ago 
Many departments report decline in murders in 2018 — but not these cities
Many of the country's most populous cities saw murders decline from 2017 to 2018, with a few key exceptions
4H ago 
McDonald's customer-worker fight over straw caught on video
New Year's Eve encounter lands customer under arrest
4H ago
