Stocks lower after Apple revenue guidance
The pan-European Stoxx 600 index fell 0.64 percent during early morning trade, with most sectors and all major bourses in the red.
The biggest story for investors on Thursday was Apple Chief Executive Tim Cook’s letter to investors, in which he lowered the tech giant’s first-quarter revenue guidance to $84 billion, down from the $89 billion to $93 billion that had previously been forecast. The firm also lowered gross margin expectations to approximately 38 percent, down from a previously projected 38-38.5 percent.
Apple blamed a number of factors for the climbdown in guidance, including weakness in China’s economy and disappointing iPhone revenue. The news amplified fears of a downturn in global growth, as well as the effects of U.S.-Sino trade tensions on corporate earnings.
Europe’s tech sector suffered as a result, falling 2 percent. Apple suppliers in the continent also faltered, with shares of Austrian chipmaker AMS plunging 19 percent.
Looking at individual stocks, U.K. fashion retailer Next rose to the top of the European benchmark after reporting a jump in Christmas sales in the run-up to the Christmas holiday season. The firm posted a 9.2 percent rise in in-store sales and a 15.2 percent jump in online sales. Shares rose 6 percent.
Asian equities also tumbled Thursday, while U.S. futures pointed to a negative open. South Korea’s Kospi slid almost 0.81 percent at the close as domestic Apple suppliers fell, while China’s Hang Seng index dropped 0.22 percent. Dow futures, meanwhile, indicated a more than 300-point drop at the open, with S&P 500 futures falling 1.4 percent and Nasdaq futures down 2.6 percent.
Another focus for investors was an apparent “flash crash” in foreign exchange markets that saw the Japanese yen soar versus most major currencies within seconds. The U.S. dollar sank 1 percent against the yen, to 107.72.
Stateside, Congress and the White House failed to reach a funding deal Wednesday to end the partial government shutdown. The main source of contention for the two main parties is President Donald Trump’s demand for $5 billion to fund a border wall between the U.S. and Mexico.
Elsewhere, German Economy Minister Peter Altmaier said in an interview published Thursday that the U.K.’s withdrawal from the European Union poses an economic risk, although he added that he expected growth in Germany to continue.
According to a survey released by U.K. industry body the British Chambers of Commerce on Thursday, the percentage of services firms reporting a rise in domestic sales fell to the lowest level in two years in the fourth quarter.
In terms of data, the Swiss SVME Purchasing Managers’ Index (PMI) rose to 57.8 in December, beating expectations for a reading of 57.2. U.K. construction PMI and euro zone money supply figures are due later in the morning.