tocks fell in a broad market selloff yesterday, led by a sharp fall in Apple shares on worries about slowing demand for its products and weaker-than-expected results from Bank of America that battered the financial sector.
Apple slid 5.5 per cent to $402.80 after falling below $400 for the first time since December 2011. A key supplier, chipmaker Cirrus Logic, gave a disappointing revenue forecast, fueling worries about weakening demand for the iPhone and iPad.
The CBOE Volatility index, a measure of investor anxiety, jumped 18.3 per cent to 16.51. It remains well below the 20 mark, however, suggesting volatility is still considered relatively subdued.
Yesterday’s losses were the week’s second big sell-off, adding to views the market may be starting the pullback analysts have been speculating about for months. The market has had strong gains since the start of year, yet on Monday, the S&P 500 posted its worst day since 7 November following a sharp drop in gold prices.
“After Monday’s gold selloff spooked US equities, it seems as though the dip buyers are a bit less aggressive, allowing the market to fall a bit more,” said Gordon Charlop, a managing director at Rosenblatt Securities.
“This could also be indicative of a muted risk tolerance and perhaps mark the beginning of a long-awaited equity pullback.”
The Dow Jones industrial average was down 138.19 points, or 0.94 per cent, at 14,618.59. The Standard & Poor’s 500 Index was down 22.56 points, or 1.43 per cent, at 1,552.01. The Nasdaq Composite Index was down 59.96 points, or 1.84 per cent, at 3,204.67.
Financial stocks also fell after Bank of America posted revenue and profits that were below Wall Street expectations. Shares of the Dow component slumped 4.7 per cent to $11.70.