US stocks traded lower in late morning trading with the Nasdaq Composite slipping more than 1% weighed down by disappointing results by technology companies including Apple.
The Dow Jones Industrial Average most recently dropped 61 points or 0.3% at 17,870 points. Apple contributed more than 40 points to the decline.
The S&P 500 Index slipped 5 points or 0.3% at 2,114 points with five of its ten key sectors trading in the red. Technology stocks led the losses falling by more than 1.6%
The technology heavy Nasdaq Composite retreated further from its record close on Monday falling 42 points or 1% at 5,158 points.
“The question now is if the markets are fully valued and can they move higher without earnings growth,” Jerry Braakman, chief investment officer of First American Trust in Santa Ana, California, which oversees $1.1 billion, told Reuters.
Apple Inc. the world’s largest publicly traded company slumped more than 6.7% to about $121.49 a share a day after reporting lower than expected quarterly sales for the quarter ending June.
The company also indicated that its revenue for the fourth quarter would fall below market expectations despite reporting a 38% growth in quarterly profit and a 35% growth in the number of I phones sold.
Fluctuations in Apple stock can spark massive moves across the major indexes in the country. The country has an outsize impact in the Nasdaq Composite and the benchmark S&P 500 Index as the biggest company by market capitalization in these two indexes.
”Not only is it a huge company, there are a lot of companies that depend on Apple for their businesses,” Chris Gaffney, president of EverBank World Markets, told the Wall Street Journal.
“With future demand possibly not as strong, we saw those shares get hurt overseas,”
Also weighing technology stocks down was Microsoft Corp which reported a $3.2billion loss for the three months ending June 31st, on a write down tied to its acquisition of Nokia earlier in its fiscal year Shares fell 3.1%.
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