Dow, S&P 500 hurt by Apple warning

Video credit: Reuters Studio
Published on February 18, 2020 - Duration: 02:07s

Dow, S&P 500 hurt by Apple warning

Investors pushed the Dow and S&P 500 lower after Apple warned sales will underwhelm due to the impact of the coronavirus outbreak on store traffic and production in China.

Conway G.

Gittens has the daily market round-up.


Dow, S&P 500 hurt by Apple warning

Markets were under pressure Tuesday after the coronavirus outbreak in China lead to the biggest sales warning yet.

The Dow and the S&P 500 finished the day lower but the Nasdaq managed to squeeze out a one point gain -enough for a record closing high.

Setting the downbeat tone: Apple.

It warned it is not going to sell as many iPhones as expected this quarter for two reasons: sales are down since millions of Chinese customers were ordered in January to stay in doors to limit the spread of the virus AND production took a hit with workers in Apple's major factory hub ordered to stay home, which means there'll be a shortage of new iPhones to sell around the world.

Shares of Apple were down and so were iPhone component makers.

For Jeff Tomasulo CEO of Vespula Capital and co-founder of Tactical Income, the Apple news underscores a major worry about the coronavirus outbreak.

SOUNDBITE (ENGLISH): JEFF TOMASULO, CEO, VESPULA CAPITAL, SAYING: "The thing that is concerning me is I think we underestimated the effects.

Were we getting the correct information coming out of China?

The amount of deaths that were happening and the among of people effected.

So you're making decisions on really faulty data and were Apple and all these other companies making the same decisions based off of that.

It is something we are definitely going to keep our eyes on for the next couple of weeks and see how it unfolds." Walmart also said Tuesday it expects to see a negative impact in the first quarter and likely in the second quarter due to reduced store hours in China - but there was bigger news from the company's quarterly results.

Online holiday sales were the weakest in two years and in-store quarterly sales missed analysts forecasts due to weak clothing and toy sales.

Walmart is struggling to compete with Amazon.

One analyst, however, remained upbeat, saying: Walmart still has the room to "transition into a omnichannel powerhouse." Investors seem willing to give Walmart the benefit of the doubt.

The stock reversed an early loss to finish the session with a gain.

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