Technology stocks led the declines with chipmakers and other phone part suppliers both in the United States and around the world in the red.
But the uptick didn't continue.
Apple (AAPL) unexpectedly slashed its revenue forecast for the fiscal first quarter of 2019 on Wednesday, citing weakness in China and lower-than-anticipated iPhone revenue. In his letter, Cook said that more than 100% of the company's worldwide revenue decline was in China for sales of iPhones, Macs and iPads.
Cook blames the expected revenue drop on fewer-than-expected iPhone upgrades and weakened demand in China.
Cook states that the "magnitude of the economic deceleration" in Greater China took Apple by surprise, resulting in much of its revenue decline.
Growth in China past year is set to be the weakest since 1990. Trade tensions between Beijing and Washington have also intensified with tit-for-tat tariffs. The US president who has been at loggerheads with China and one of the big reason Apple said its revenue has fallen down has been the trade war between the two countries.
Consumers are more likely to curb spending on big-ticket items during economic downturns, and there are worries over "consumption downgrade" in China. "And market data has shown that the contraction in Greater China's smartphone market has been particularly sharp", he said. FedEx Corp., Starbucks Corp., Tiffany & Co. and Daimler AG are also finding it harder to sell their wares in the world's second-largest economy.
In an open letter to investors published last night, Apple cut its revenue forecast for the busy Christmas quarter by 7.8 percent. IHS Markit's US manufacturing purchasing managers' index was 53.8 in December, the lowest reading in more than two years, and down from 55.3 in the previous month.
Still, some local players managed to grow against the trend and they may be eating into Apple's market share.
The Dow lost 528 points, or 2.3 per cent, to 22,827.
In a report released this morning, financial analysts Canaccord Genuity believe that in spite of yesterday's report, the company is still fundamentally sound and they continue to recommend a BUY for Apple stock. Stocks went into a steep slide Thursday after Apple sent a shudder through Wall Street with word that iPhone sales in China are falling. While macroeconomic challenges in some markets were a key contributor to this trend, Apples believes there are other factors broadly impacting its iPhone performance, including consumers adapting to a world with fewer carrier subsidies, U.S. dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.
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