NEW YORK: U.S. stocks declined on Tuesday as Apple and shares of its parts suppliers weakened on a report of soft iPhone X demand, which pulled technology shares lower.
According to Taiwan's Economic Daily, citing unidentified sources, Apple will slash its sales forecast for its flagship phone in the current quarter to 30 million units, down from what it said was an initial plan of 50 million units.
The report, along with some recent brokerage calls on tepid iPhone X demand, made Apple shares sink 2.5 percent, their worst single-day percentage fall since Aug. 10.
"There is news in Apple today so it is causing some kind of angst in certainly Apple, maybe some Apple suppliers and maybe some tech in general," said Ken Polcari, Director of the NYSE floor division at O’Neil Securities in New York.
"The whole Apple thing is giving people an excuse to take some money out of tech because it has been such a great performer."
Shares of companies that supply parts to Apple, including Broadcom
The S&P technology index <.SPLRCT> fell 0.70 percent, the worst performer among the 11 major S&P 500 sectors. The index has come under pressure in recent days and suffered its fifth straight decline as market participants see tech names getting a smaller boost from last week's U.S. tax overhaul.
Despite the declines, the tech sector is still up nearly 40 percent for the year.
The Dow Jones Industrial Average <.DJI> fell 7.85 points, or 0.03 percent, to 24,746.21, the S&P 500 <.SPX> lost 2.84 points, or 0.11 percent, to 2,680.5 and the Nasdaq Composite <.IXIC> dropped 23.71 points, or 0.34 percent, to 6,936.25.
Most markets around the world, including parts of Europe and Asia, were shut on Tuesday. Trading volumes were light due to the holiday-shortened week.
Losses were curbed by a boost in energy stocks as oil prices jumped more than 2 percent, helped by an explosion on a crude pipeline in Libya and voluntary OPEC-led supply cuts.
Shares of department store operators Kohl's
Advancing issues outnumbered declining ones on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favored decliners.
The S&P 500 posted 39 new 52-week highs and two new lows; the Nasdaq Composite recorded 88 new highs and 26 new lows.
Volume on U.S. exchanges was 4.03 billion shares, the lowest volume of the year for a full session, compared to the 6.9 billion average for the full session over the last 20 trading days. - Reuters
Reuters also reported:
Globally, investors scooped up commodities on Tuesday during a holiday-shortened week, but took a far more mixed view of equities as shares of Apple Inc sagged.
Many markets around the world, including in parts of Europe and Asia, were shut on Tuesday after the Christmas Day holiday, and trading volumes were light. U.S. stock exchange share volumes for the day were their lowest since Nov. 24, another post-holiday trading session, according to Thomson Reuters data.
Commodities firmed, with oil moving to its highest since 2015, supported by an explosion on a crude pipeline in Libya and voluntary supply cuts led by the Organization of the Petroleum Exporting Countries.
Gold prices hit more-than-three-week highs, and palladium hit its highest since February 2001 on supply worries. Spot gold
"There probably are a good number of U.S. investors that have slight to moderate overexposure to domestic stocks - we've had a great performance year," said Invesco Ltd
"It could be an opportunity to do some profit-taking, a little bit of trimming, and moving to areas that have lower valuations."
MSCI's measure of stocks across the globe shed 0.05 percent.
Volatility, notably lacking in U.S. markets in 2017, gained during the light trading day. The CBOE Volatility Index <.VIX>, an options-based gauge, rose 0.35 points, to 10.25.
TWO-YEAR YIELDS RISE
Two-year U.S. Treasury yields rose to nine-year highs, exacerbating a collapse of the gap in yields between short and long-term bonds. The gap between 2-year and 10-year yields shrank to 56.7 basis points as the United States sold $26 billion in the shorter-duration notes.
Benchmark 10-year notes
Currencies changed little during the day. The dollar index <.DXY>, tracking the U.S. unit against a basket of major currencies, fell 0.09 percent, with the euro
Japan's households spent more than expected in November while consumer inflation ticked up and the jobless rate hit a fresh 24-year low, according to data earlier on Tuesday, offering the nation's central bank some hope an economic recovery will drive up inflation to its 2 percent target. - Reuters