Global equity markets fell yesterday, pulled lower by a weak revenue forecast at Apple Inc, the world’s largest company, while a rebounding dollar after its biggest decline in a month weighed on gold and some stocks.
Apple’s shares tumbled seven per cent after the company’s fourth-quarter revenue forecast fell short of estimates and it missed some targets for iPhone sales.
The poorly received earnings report hit companies with close ties to Apple. In Europe, chip designer ARM Holdings, a major supplier, fell six per cent and German chipmaker Dialog Semiconductor tumbled 6.6 per cent.
Across Europe, technology stocks shed nearly $6 billion of market value.
Art Hogan, chief market strategist at Wunderlich Securities in New York, said there is concern regarding the lack of organic revenue growth and the strong dollar, which will continue to be a drag but that effect should moderate over time.
The FTSEurofirst 300 index of leading European shares fell 0.55 per cent at 1,587.50, while MSCI’s all-country world stock index was down 0.67 per cent.
On Wall Street, the Dow Jones industrial average fell 58.76 points, or 0.33 per cent, to 17,860.53. The S&P 500 slid 5.46 points, or 0.26 percent, to 2,113.75 and the Nasdaq Composite lost 39.47 points, or 0.76 per cent, to 5,168.65. The dollar index, a gauge of the greenback against a basket of currencies, extended its rise after data showed US home resales hit an 8-1/2-year high in June, and was last up 0.33 per cent at 97.648.
The euro fell 0.39 per cent to $1.0893, while the dollar rose 0.12 per cent at 124.02 yen.
Sterling gained in response to minutes from the Bank of England’s last meeting that suggested some policymakers support higher interest rates.
The British pound rose 0.5 per cent at $1.5631.
Oil prices fell as US crude stockpiles rose last week, remaining high above the five-year seasonal average, while gasoline stocks decreased and distillate inventories rose, data from the Energy Information Administration showed.
Brent crude was down 69 cents at $56.35 a barrel. US crude dipped below $50 a barrel, trading down 92 cents at $49.94 a barrel.
Gold fell more than one per cent to a five-year low as a bounce in the dollar fuelled downside momentum. Copper prices hit a two-week low as worries about demand from top consumer China mounted.
Benchmark and long-dated Treasury yields hit their lowest levels in nearly two weeks as poor sentiment from US corporate earnings reports drove safe-haven buying.