U.S. stocks drop after Apple warns of financial hit from coronavirus
Apple's stock fell almost 2% at close of trading Tuesday, a day after the technology giant warned shareholders of a coming financial hit due to the coronavirus outbreak in China.
The maker of iPhones said it will fall short of its revenue forecasts in the quarter ending June 30 because of production problems in China. Demand for iPhones is also down in China because stores selling Apple products are either closed or operating on reduced hours.
Apple's stock price dropped to about $320 a share following the news. Chipmakers, which also rely heavily on China for sales and supplies, saw their shares drop, too, with Intel Corp. shedding 1.2%. Banks and energy stocks also fell Tuesday: Wells Fargo slid 1.1% and Schlumberger slipped 1.4%.
The S&P 500-stock index was down almost 0.3% at close Tuesday, although the benchmark for the U.S. stock market remains up 3% since January 1. The Dow closed down 0.6%, or nearly 166 points.
The viral outbreak that began in China has now infected more than 73,000 people and killed more than 1,800. The majority of the cases and deaths remain centered in China.
Apple is the biggest company to warn investors as businesses around the world continue to feel the economic impact from the virus. The Beijing auto show, the car industry's biggest global event of the year, is being postponed indefinitely from its April date.
Technology and health care companies have been the most vocal about mentioning the new coronavirus in their earnings conference calls, according to FactSet.
The virus will have a negative impact on online bookings for travel and perhaps a positive outcome for health care companies focused on vaccines, according to an Oppenheimer research note.
