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Stocks tumbled Thursday on Wall Street, with technology companies suffering their worst loss in seven years, after Apple reported that iPhone sales in China are slumping. The TSX also suffered losses, but not nearly to the extent as south of the border.

The rare warning of disappointing results from Apple reinforced investors’ fears that the world’s second-biggest economy is losing steam and that trade tensions between Washington and Beijing are making things worse.

The Dow Jones Industrial Average plunged 660 points, and the broader S&P 500 index fell 2.5 per cent.

Apple stock plummeted 10 per cent, erasing more than $74 billion in market value. Technology companies and other major exporters, including heavy-machinery companies, also took big losses.

Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets.

“For a while now there’s been an adage in the markets that as long as Apple was doing fine, everyone else would be OK,” said Neil Wilson, chief markets analyst at “Therefore, Apple’s rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific.”

Investors were also unsettled by a report Thursday that showed signs of weakness in U.S. manufacturing.

The U.S.-China trade dispute threatens to snarl multinational companies’ supply lines and reduce demand for their products. Companies such as General Motors, Caterpillar and Daimler have all said recently that trade tensions, combined with slower growth in China, were damaging their businesses.

“When the largest and second-largest economies in the world get into a trade dispute, the rest of the world’s going to feel the effects. That’s what we’re seeing now,” said Jack Ablin, chief investment officer of Cresset Wealth Advisors.

In a letter to shareholders Wednesday, Apple CEO Tim Cook said iPhone demand is waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects revenue of $84 billion for the quarter. That’s $7 billion less than analysts expected.

Cook’s comments echoed the concerns that have pushed investors to flee the stock market over the last three months. Many global indexes posted their worst year in a decade amid concerns about the global economy and the prospect of further U.S. interest rate increases.

The S&P 500 lost 62.14 points to 2,447.89. The Dow slid 2.8 per cent to 22,868.22. The Nasdaq, which has a high concentration of tech stocks, retreated 202.43 points, or 3 per cent, to 6,463.50.

U.S. government bond prices surged, sending yields to their lowest level in almost a year, and gold and high-dividend stocks like utilities also rose as investors looked for safer places to put their money.

A weak report Thursday on U.S. manufacturing also weighed 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.

Apple’s stock has slumped 39 per cent since early October. The company also recently announced that it would stop disclosing how many iPhones it sold each quarter, a move many investors suspected was an attempt to hide bad news.

Apple took its biggest loss in six years Thursday and ended at $142.19. Microsoft shed 3.7 per cent to $97.40. Among chip makers, Intel fell 5.5 per cent to $44.49. The S&P 500 technology companies had their worst day since August 2011.

Among big industrial companies, Caterpillar gave up 3.9 per cent to $121.51, and Deere lost 2.7 per cent to $144.05. Boeing, which sells many of its planes in China, declined 4 per cent to $310.90.

Companies that make heavy machinery such as construction equipment are facing less demand as China’s economy, the largest in the world after the U.S., loses strength. They are also dealing with higher costs for metals as a result of tariffs.

Markets overseas also stumbled. Germany’s DAX dropped 1.5 per cent and the French CAC 40 fell 1.7 per cent, and Britain’s FTSE 100 gave up 0.6 per cent. In Asia, tech-related stocks suffered most. South Korea’s Kospi ended 0.8 per cent lower and Hong Kong’s Hang Seng gave up 0.3 per cent.

Oil prices edged higher. U.S. crude rose 1.2 per cent to $47.09 a barrel in New York and Brent crude rose 1.9 per cent to $55.95 a barrel in London. Oil prices have nosedived almost 40 per cent since early October, and investors’ fears about falling demand in China and elsewhere were a key reason for the decline.

The yield on the 2-year Treasury note slid to 2.39 per cent from 2.50 per cent, and the yield on the 10-year note sank to 2.56 per cent from 2.66 per cent. Both were large moves.

The dollar weakened. It fell to 107.777 yen from 109.21 yen. The euro rose to $1.1391 from $1.344. The British pound fell to $1.2630 from $1.2690.

Gold climbed 0.8 per cent to $1,294.80 an ounce. Silver rose 0.9 per cent to $15.80 an ounce. Copper, which is used in construction and wiring, fell 2.1 per cent to $2.57 a pound.

In other commodities trading, wholesale gasoline rose 1.8 per cent to $1.35 a gallon and heating oil climbed 2.4 per cent to $1.74 a gallon. Natural gas fell 0.4 per cent to $2.95 per 1,000 cubic feet.

Canadian market

Canada’s main stock index posted a triple-digit decline as the S&P/TSX composite index closed down 134.41 points to 14,212.75.

The tech sector took the brunt of the losses, falling 4 per cent, led by a 6.5 per cent decline in Shopify Inc. Gold stocks mostly rose amid the gain in bullion prices as investors sought safe havens.

Only defensive sectors posted small gains, with communication services rising 0.2 per cent and utilities gaining 0.1 per cent.

The Associated Press with staff

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