Wall Street tumbles at open on retail gloom, tech concerns
(Reuters) - The S&P 500 hit a three-week low on Tuesday as weak results and forecasts from a bunch of retailers including Target and Kohl's fanned worries about holiday season sales, while tech stocks continued to slide on concerns about iPhone sales.
Apple Inc's 3.8 percent fall added to the pressure as the stock that led the market through much of its bull run opened at its lowest level since early May, pushing the tech-heavy Nasdaq to more than 7-month lows.
Should Apple's loss hold through the day, its shares would have lost more than 20 percent of their value, or around $250 billion, since closing at a record high on October 3.
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Goldman Sachs trimmed its price target on Apple for the second time in just over a week, saying the balance of price and features in the new iPhone XR may not have been well-received by users outside of the United States.
Retailers took a hammering with Target down 9.9 percent after it posted a lower-than-expected third-quarter profit. Home improvement chain Lowe's Cos Inc fell 2.6 percent after it unveiled more restructuring plans in the face of worse-than-expected comparable sales numbers.
Department store operator Kohl's Corp shed 10.9 percent after its full-year profit forecast fell below expectations.
The S&P 500 retailing index shed 3 percent.
"It's a growth related selloff. It's not a specific name. People think growth has peaked and earnings have peaked," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
"Some of the big retailers are now cracking and that's just adding fuel to the fire."
At 10:02 a.m. EDT the Dow Jones Industrial Average was down 479.52 points, or 1.92 percent, at 24,537.92, the S&P 500 was down 45.55 points, or 1.69 percent, at 2,645.18 and the Nasdaq Composite was down 144.22 points, or 2.05 percent, at 6,884.25.
Signs of slowing demand for Apple's flagship iPhones have wide-ranging implications for technology and internet companies at a time when investors are fretting over peaking corporate earnings growth, rising borrowing costs, and a global economy weighed down by trade tensions.
The FANG group also continued to lose steam, with Facebook Inc, Amazon.com Inc, Netflix Inc and Alphabet Inc sliding between 1.3 percent and 4 percent.
Chipmakers Advanced Micro Devices Inc declined 4.9 percent while Micron Technology Inc lost 4.7 percent, while Nvidia Corp and Intel Corp fell 0.8 percent and 1 percent respectively.
Ten of the 11 major S&P sectors were lower, with only defensive utilities posting slight gains.
Boeing Co was the top decliner on the Dow, falling 3.3 percent as it canceled a conference call to discuss systems on the 737 MAX model that crashed in Indonesia last month.
Most cyclical sectors including energy, materials, industrial and financial felt the heat as investors rushed to safe-haven bonds.
Declining issues outnumbered advancers for a 7.45-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 4.93-to-1 ratio on the Nasdaq.
The S&P index recorded 18 new 52-week highs and 37 new lows, while the Nasdaq recorded 3 new highs and 186 new lows.
(Reporting by Medha Singh, additional reporting by Parikshit Mishra in Bengaluru; Editing by Anil D'Silva)