Stocks went into a steep slide Thursday morning after Apple reported a slowdown in iPhone sales over the holidays in China, a hugely important market for the company.

The rare warning from Apple sent a shudder through markets and confirmed fears among investors that the worldB次元官网网址檚 second-largest economy was weakening.

The Dow Jones Industrial Average fell more than 600 points about an hour into trading.

AppleB次元官网网址檚 stock plunged 10 per cent, erasing $67 billion in value. Other big exporters including technology and machinery companies also took big losses.

Some of the worst drops went to chipmakers that make components used in smartphones and other gadgets. The trade dispute, nearly a year old, threatens to snarl their supply lines and reduce demand for their products. Tariffs and other trade sanctions could add to their difficulties.

The losses deepened after a survey of U.S. manufacturers also showed signs of weakness. The benchmark S&P 500 index was down 2.4 per cent as of 10:45 a.m.

In a letter to shareholders on Wednesday, Apple CEO Tim Cook said iPhone demand was waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects revenue of $84 billion for the quarter. ThatB次元官网网址檚 $7 billion less than analysts expected, according to FactSet.

AppleB次元官网网址檚 warning, its first since 2002, deepened concerns about the Chinese economy, which had been showing signs of stress.

The S&P 500 dropped 60 points to 2,449. The Dow slid 642, or 2.7 per cent to 22,707. The Nasdaq composite, which has a high concentration of tech stocks, retreated 185 points, or 2.8 per cent, to 6,482.

B次元官网网址淔or a while now thereB次元官网网址檚 been an adage in the markets that as long as Apple was doing fine, everyone else would be OK,B次元官网网址� said Neil Wilson, chief markets analyst at Markets.com. B次元官网网址淭herefore, AppleB次元官网网址檚 rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific?B次元官网网址�

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AppleB次元官网网址檚 warning couldnB次元官网网址檛 have come at a worse time for stock market investors given the wipeout in late 2018, when many global indexes posted their worst performances in a decade amid concerns about the global economy and the prospect of further U.S. interest rate hikes.

A weak report on U.S. manufacturing was also weighing on the market. The Institute for Supply Management said its index of manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. Manufacturing is still growing, but at a slower pace than it has recently.

In times of market stress and volatility, there are some assets that traditionally do well as investors perceive them as safer to hold. U.S. government bond prices, gold and high-dividend stocks like utilities all rose.

Apple stock has slumped 38 per cent since early October as investors feared a sales slowdown in China. The company also recently announced that it would stop disclosing how many iPhones it sold each quarter, and many investors felt that suggested the company was trying to hide signs that its sales were cooling off. Its stock fell to $143.58.

Other major tech companies have also taken huge losses over the last three months as the market endured its worst slump in almost a decade. While stocks rebounded slightly at the end of 2018, AppleB次元官网网址檚 troubles added to their losses Thursday. Microsoft shed 1.6 per cent to $99.46. In the chip industry, Intel fell 4.1 per cent to $45.17 and Qualcomm lost 2.4 per cent to $56.04 while Skyworks skidded 7.6 per cent to $62.77.

Among big industrial companies, Caterpillar gave up 3.5 per cent to $121.90 and Deere lost 2.5 per cent to $144.93. Companies that make heavy machines like construction equipment are facing less demand as ChinaB次元官网网址檚 economy, the largest in the world after the U.S., loses strength. TheyB次元官网网址檙e also dealing with higher costs for metals as a result of import taxes.

Bonds prices jumped. The yield on the 10-year Treasury note fell to 2.58 per cent from 2.66 per cent late Wednesday, a large move.

Markets overseas held up a bit better. GermanyB次元官网网址檚 DAX and the French CAC 40 both fell 1.2 per cent, and BritainB次元官网网址檚 FTSE 100 dipped 0.2 per cent. In Asia, tech-related stocks suffered most. South KoreaB次元官网网址檚 Kospi ended 0.8 per cent lower and Hong KongB次元官网网址檚 Hang Seng gave up 0.3 per cent.

Oil prices were little changed. U.S. crude stayed at $46.52 a barrel in New York and Brent crude rose 0.4 per cent to $55.13 a barrel in London. Oil prices have nosedived almost 40 per cent since early October, and investorsB次元官网网址� fears about falling demand in China and elsewhere were a key reason for the decline.

The dollar weakened. It fell to 107.46 yen from 109.21 yen. The euro rose to $1.1403 from $1.344. The British pound fell to $1.2596 from $1.2690.

Gold also rose, by 0.6 per cent to $1,291 an ounce.

Some experts believe that the market volatility could eventually lead to changes in the policies that are concerning investors. The Fed, for example, could slow the pace of its interest rate increases if markets continue to drop. And U.S. President Donald Trump could become more open to settling the trade dispute with China.

B次元官网网址淚t is a well-known fact that Trump perceives the markets as a true barometer of his presidency,B次元官网网址� said Piotr Matys, a strategist at Rabobank International.

The Associated Press

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