(Reuters) - Technology stocks dragged down Wall Street on Tuesday after a surprise sales warning from bellwether Apple fanned worries about the impact of the coronavirus outbreak on global supply chains.
The world’s most valuable technology firm (AAPL.O) said it was unlikely to meet its March-quarter sales guidance because of slower iPhone production and weaker demand in China, sending its shares down 2.5%.
The news also sent shares of Apple suppliers, including Qualcomm Inc (QCOM.O), Broadcom Inc (AVGO.O), Qorvo Inc (QRVO.O) and Skyworks Solutions Inc (SWKS.O), lower by 1.9% to 3%.
Chipmakers, which are heavily dependent on China for revenues, slipped with the Philadelphia SE Semiconductor index .SOX shedding 1.6%, while the broader S&P technology sector .SPLRCT lost 0.7%.
Apple’s warning highlights issues that will eventually hurt a lot of companies with exposure to China, said Art Hogan, chief market strategist at National Securities in New York.
“It has shifted people’s focus back to the ultimate economic damage in the wake of this coronavirus,” Hogan said.
While the exact hit to growth from the epidemic in China - the global manufacturing hub - still remains to be seen, hopes that the damage would only be temporary have helped Wall Street’s main indexes clinch record highs as early as last week.
At 9:52 a.m. ET, the Dow Jones Industrial Average .DJI was down 106.66 points, or 0.36%, at 29,291.42, while the S&P 500 .SPX was 7.49 points, or 0.22%, lower at 3,372.67.
The Nasdaq Composite .IXIC was down 19.12 points, or 0.20%,
