Tuesday's Stock Market Open: US Equities Drop As Apple Warns Of Revenue Shortfall

Update: 12:05 p.m. EST

U.S. stocks traded lower as of noon on Tuesday as investors grappled with a disappointing outlook from tech giant Apple.

The Dow Jones Industrial Average dropped 260.24 points to 29,137.84 while the S&P 500 fell 22.53 points to 3,357.63 and the Nasdaq Composite Index tumbled 49.37 points to 9,681.80.

In Europe markets finished lower, as Britain’s FTSE-100 dropped 0.63%, France’s CAC-40 fell 0.48% and Germany’s DAX slipped 0.75%.

Original story:

U.S. stocks opened lower on Tuesday after tech giant Apple warned its second quarter sales will fall below expectations.

The Dow Jones Industrial Average dropped 163.68 points to 29,234.40 while the S&P 500 fell 13.05 points to 3,367.11 and the Nasdaq Composite Index tumbled 46.66 points to 9,684.52

China’s National Health Commission reported on Tuesday that there was a total of 72,346 confirmed cases of coronavirus in the country and 1,868 deaths as of Monday night.

Apple Inc. (AAPL) warned on Monday that its fiscal second quarter sales will fall short of forecasts, citing production slowdowns and weakened demand in China due to the coronavirus outbreak. Apple shares were down about 2.7%.

HSBC Plc (HSBC) said it will cut about 35,000 jobs over the next three years in a “fundamental restructuring” after its profits plunged in 2019. HSBC shares dropped 4.6%.

“Longer term, it is also possible that we may see revenue reductions from lower lending and transaction volumes, and further credit losses stemming from disruption to customer supply chains,” Noel Quinn, HSBC’s interim chief executive, said.

The ZEW Research Institute said on Tuesday that German investor confidence plunged to 8.7 in February from 26.7 in January. “The feared negative effects of the coronavirus epidemic in China on world trade have been causing a considerable decline [in sentiment],” said ZEW President Achim Wambach. “Expectations regarding the development of the export-intensive sectors of the economy have dropped particularly sharply.”

The Office for National Statistics said on Tuesday that the number of people in the U.K. working climbed by 180,000 in the fourth quarter, placing the unemployment rate at 3.8%, a four-decade low.

“The big job gain and an unemployment rate below 4% is a strong rebuttal of the case for easing by the Bank of England, particularly with a fiscal boost on the way,” said Dan Hanson, an economist at Bloomberg.

The New York Fed said on Tuesday that its Empire State business conditions index rose 8.1 points to 12.9 in February -- the highest level since last May.

“Sentiment toward global risk turned sour [Tuesday],” said Dariusz Kowalczyk, an emerging-markets strategist at Credit Agricole SA. “We continue to believe that markets have not yet fully priced in the magnitude of the hit to China’s economy as a result of the Covid-19 outbreak.”

Overnight in Asia, markets finished mostly lower. China’s Shanghai Composite edged up 0.05%, while Hong Kong’s Hang Seng fell 1.54%, and Japan’s Nikkei-225 dropped 1.4%.

In Europe markets traded lower, as Britain’s FTSE-100 dropped 0.69%, France’s CAC-40 fell 0.2% and Germany’s DAX slipped 0.56%.

Crude oil futures dropped 1.86% at $51.08 per barrel and Brent crude plunged 2.12% at $56.45. Gold futures rose 0.55%.

The euro slipped 0.33% at $1.0799 while the pound sterling gained 0.15% at $1.3024.