Stocks drop on Apple’s revenue warning

U.S. stock indexes closed with mostly modest losses Tuesday as the market gave up some of its solid gains from the past two weeks.

Banks and technology stocks accounted for most of the decline. The Nasdaq eked out a tiny gain that was good enough to nudge it to another record high.

The selling, which lost some of its momentum in the final hour of trading, came as investors weighed the impact of the virus outbreak in China on Apple and other major companies.

The tech giant said revenue will fall short of previous forecasts in the fiscal second quarter because production has been curtailed and consumer demand for iPhones has slowed in China. Apple’s stores there are either closed or operating on reduced hours.

The iPhone maker is among the most notable companies to warn investors that the virus will hurt its financial performance. Medical device maker Medtronic also warned Tuesday that the outbreak will impact its quarterly results.

“The longer this goes on, the greater the focus is going to be on how much is this going to impact companies like Apple, which is not only a bellwether in tech, but a bellwether for the market overall,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab.

The S&P 500 index fell 9.87 points, or 0.3 percent, to 3,370.29. The benchmark index remains just below its all-time high set on Friday.

The Dow Jones Industrial Average slid 165.89 points, or 0.6 percent, to 29,232.19. It had been down as many as 281 points. The Nasdaq recovered from an early slide, inching up 1.57 points, or less than 0.1 percent, to 9,732.74.

The Russell 2000 index of smaller company stocks fell 4.06 points, or 0.2 percent, to 1,683.52.

European and Asian markets declined. Bond prices rose. The yield on the 10-year Treasury fell to 1.56 percent from 1.58 percent late Friday.

Stocks opened lower Tuesday as U.S. markets reopened following the Monday’s President’s Day holiday.

As in recent weeks, traders reacted to the latest developments in the viral outbreak that began in China and has since infected more than 73,000 people. Most of of the cases remain centered in China.

Businesses worldwide are inconsidered creasingly caught in the economic fallout from the outbreak. Apple and Medtronic are only the latest notable examples of companies that have warned investors about the economic impact of the outbreak on their financial performance.

Technology and health care companies have been the most vocal about mentioning the new coronavirus in their earnings conference calls, according to FactSet.

Some analysts played down the long-term impact of the iPhone production delay on the company.

Apple shares fell 1.8 percent, while Medtronic slid 4 percent.