The selloff in Apple and other stocks earlier this week spread Tuesday to other sectors, such as retail and energy, pushing Dow Jones Industrial Average and other major indexes into the red for 2018.
The Dow Industrials fell more than 600 points, or 2.2%, to 24,465.64, while the S&P 500 Index declined 1.8% to 2.641.89. The Nasdaq Composite closed down 1.7% at 6,908.82. All three indexes dropped below their 2017 closing levels during Tuesday’s trading.
Some of the FAANG stocks, which led a tech selloff during Monday’s market session, recovered slightly on Tuesday. Facebook closed up 0.7% at $132.43 after having lost nearly 40% of its peak 2018 value. Alphabet edged up 0.29% while Amazon fell another 1.1% and Netflix declined 1.3%. According to Barrons’ the five FAANG stocks have lost more than $300 billion in market value in the past month alone.
Apple, meanwhile, tumbled another 4.9% amid lingering concern about demand for its newly released iPhones. Goldman Sachs dropped its price target on Apple’s stock to $182 a share from $209 a share, noting “the iPhone XR may not have been well received by users outside of the U.S.”
The concern afflicting tech stocks spread to retail early Tuesday after Target said revenue rose 5.6% in its most-recent quarter. Same-store sales, a metric watched closely by retail analysts, grew by 5.1%, below what Wall Street had been expecting. That miss helped push Target’s shares down 11%. Other retailers also fell, with Walmart dropping 2.7% and Costco down 4.1%.
Oil stocks also tumbled as the price of oil continued to decline, with shares of Exxon and Chevron both down 2.8%. Some market observers are worried that the drop in tech stocks, now into its second month, could weigh on the broader global economy.
“Short term, unexpected weakness in the tech sector could have a significant impact on the global economy, adding to what already looks like a soggier macro environment,” Dario Perkins, a managing director at TS Lombard, said in a note. “Additional retrenchment in the FAANGs could also undermine the broader US stock market.”