US open: Heavy losses at the bell as tech rout continues
Wall Street trading started with heavy losses on Tuesdayw with the tech in focus again following a dismal session the day before.
At 1520 GMT, the Dow Jones Industrial Average was down 2.02% to 24,511.26, while the S&P 500, which was nearing correction territory, had lost 1.71% at 2,644.85 and the Nasdaq was trading 2.05% softer at 6,884.56.
The Dow opened nearly 600 points lower on Tuesday adding to the prior session's drop of almost 400 points, while the tech-heavy Nasdaq Composite finished 219 points lower as shares in tech giants Apple, Amazon and Facebook continued to skid lower.
Apple was rocked by reports that it has slashed production orders in recent weeks for all three iPhone models that were unveiled in September.
"Investors had been nervous about the outlook for Apple and it's flagship devices since the firm announced that it would no longer be reporting a breakdown of sales figures by product in its most recent earnings update. News of slashed production orders has just confirmed those fears, forcing investors to reassess Apple’s outlook," said London Capital Group analyst Jasper Lawler.
Meanwhile, Oanda analyst Craig Erlam said: "With FAANG stocks now all in bear market territory and not yet coming to the rescue of the rest of the market, investors have been left wondering if this is going to get messy or whether Black Friday has come a little early in stock markets. There still appears to be a lot of underlying anxiety in the markets which may prolong the current sell-off a little longer, with trade wars, US interest rates, Brexit and the Italian budget standoff all being significant headwinds."
Overnight, analysts at Goldman Sachs cut their target for shares of Apple from $209 to $182.
Also weighing on sentiment was news that the Trump administration was considering tightening controls on high-technology exports, including those related to artificial intelligence and other so-called 'dual-use' technologies, as part of its ongoing trade war with China.
In corporate news, consumer electronics retailer Best Buy ticked ahead 0.19% following better-than-expected third-quarter results, while Lowe's dropped 4% at the open after the retailer's quarterly earnings and revenue beat forecasts but it cut its full-year estimates.
Hormel Foods was down 2.76% after its fourth-quarter earnings beat expectations but sales missed, while department store retailer Target was 10.8% lower in early trade after a mixed third-quarter update.
Apple's woes continued with its stock trading down by 4.44% shortly after the bell.
On the data front, a key indicator of activity in the US housing sector picked-up more quickly than expected last month, although the details of the report were a bit weak.
According to the Department of Commerce, the annualised pace of growth in housing starts increased at a month-on-month pace of 1.5% in October to reach 1.228m.
That was a tad shy of economists' median forecast for 1.3m, but an upwards revision to the prior month's reading, from 1.201m to 1.210m, more than offset that shortfall.
However, starts for single-family homes, the most closely followed piece of data in the report, weakened by 1.8% on the month to reach an annualised pace of 865,000, even as multi-family starts jumped by 6.2% to 343,000.
Housing permits, or authorisations to begin construction work, on the other hand, slipped by 0.6% versus September to reach an annualised clip of 1.263m.