U.S. Markets closed

Stocks - Dow Sheds 600 Points as Apple Slump Triggers Tech Wreck

The Dow made a bearish start the week.

Investing.com - The Dow tumbled Monday as tech stocks continued to bleed, led by a selloff in Apple on fresh signs of weak iPhone demand.

The Dow Jones Industrial Average fell 602 points, or 2.32%. The S&P 500 fell 1.98%, while the Nasdaq Composite fell 2.78%.

A sea of red washed over Wall Street as investors scrambled from high-flying tech stocks after Apple (NASDAQ:AAPL) supplier Lumentum (NASDAQ:LITE) fell more than 30% after warning that a large customer -- widely believed to be Apple -- had requested to reduce previously placed orders scheduled for delivery in the fiscal second quarter, raising fresh concerns about iPhone demand.

Apple supply chain stocks like Qorvo (NASDAQ:QRVO) and Skyworks Solutions (NASDAQ:SWKS) were abandoned in the wake of Lumentum's guidance cut, exacerbating the selloff in tech.

TF International Securities' analysts Ming-Chi Kuo, cut his forecast for iPhone XR shipments by 30 million units in a research note issued Monday, citing several reasons including negative impacts on consumer confidence from the trade war, especially in the Chinese market.

Amazon.com (NASDAQ:AMZN), meanwhile, closed more than 4% lower to enter bear-market territory.

Risk sentiment was further soured by a slump in financials, mostly banks, led by Goldman Sachs as Malaysia reportedly is seeking a full refund of all the fees it paid to the bank for arranging billions of dollars of deals for state fund 1MDB.

Goldman Sachs has come under microscope following its role in raising $6.5 billion for 1MDB, an investment fund amid a global scandal involving claims of embezzlement and money laundering.

Goldman (NYSE:GS) fell 7.5%, while both JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) closed 2% lower.

Energy names were also shunned as oil prices erased their intraday gains following a tweet from President Donald Trump criticized Saudi Arabia's plan to cut oil production and insisting that oil prices should be much lower.

Trump also offered an alternative perspective on the recent wobble in stock markets, blaming it on the looming threat of investigations into his administration by Democrats, who regained control of the House of Representatives last week.

In corporate news, General Electric (NYSE:GE) deepened its losses as investors were not impressed by CEO Larry Culp remarks to CNBC, admitting that the company would continue to sell assets to reduce leverage levels and shore up its balance sheet. Its shares slipped 7%.

On the mergers and acquisitions front, activist investor Elliott Management joined forces with private equity firm Veritas to buy healthcare software firm athenahealth (NASDAQ:ATHN) for $5.5 billion.

And SAP (NYSE:SAP) agreed to buy Qualtrics, a privately held company that competes with SurveyMonkey, for $8 billion.

Top S&P 500 Gainers and Losers Today:

Nektar Therapeutics (NASDAQ:NKTR), NRG Energy (NYSE:NRG) and ConAgra Foods (NYSE:CAG) were among the top S&P 500 gainers for the session.

Pacific Gas & Electric (NYSE:PCG), Abiomed (NASDAQ:ABMD) and Edison International (NYSE:EIX) were among the worst S&P 500 performers of the session.

Related Articles

Apple, Goldman Sachs send Wall Street tumbling

Mexico stocks lower at close of trade; S&P/BMV IPC down 2.18%

Day Ahead: Top 3 Things to Watch