Apple loses $450 billion valuation as iPhone revenue dips.
Apple loses $450 billion in value since its peak on iPhone woes
Wall Street closed out another punishing week Friday with the S&P 500 posting its first backto-back monthly loss since the pandemic first gripped the economy in March.
The S&P 500 dropped 1.2% and ended the week with a 5.6% loss, its worst in seven months. Sharp drops in big technology stocks drove much of the selling, reflecting worries that expectations built too high for some of the market’s biggest stars, including Apple and Amazon. Investors have bid up shares in those and other Big Tech companies this year, anticipating they would deliver strong profits, but their latest results and uncertain outlooks left traders wanting.
Wall Street was already wracked by fears about the potential economic damage from surging coronavirus counts around the world, Washington’s inability to provide more support for the economy and uncertainty surrounding the presidential election.
The S&P 500 lost 40.15 points to 3,269.96. It ended October with a 2.8% loss. The Dow Jones Industrial Average fell 157.71 points, or 0.6%, to 26,501.60. Earlier, it had been being down 515 points.
The Nasdaq composite gave up 274 points, or 2.5%, to 10,911.59. The tech-heavy index is within 0.6% of a “correction,” Wall Street-speak for a decline of 10% or more from an all-time high.
Much of the market’s focus Friday was on
Apple, Amazon, Facebook and Google’s parent company. They are four of the five biggest stocks in the S& P 500 by market value, which gives their movements outsized sway on the index, and they were principal forces behind Wall Street’s huge rally since March.
All four reported profit for the summer that was even better than analysts were expecting, just like the other stock in the Big Five did earlier this week. But also like Microsoft, most nevertheless fell as investors found reasons
for concern within their reports.
Apple dropped 5.6% after investors focused on weaker revenue than expected for its iPhones and sales in China. Amazon fell 5.4%, and Facebook lost 6.3%.
Since becoming the first American company to surpass $2 trillion in market value in August and peaking last month, the iPhone maker has lost $ 450 billion, wiped out by a 19% slump. The latest bout of selling took out more than $120 billion alone.
Apple’s now worth $1.85 trillion and still the most valuable U.S. company, but the amount shaved from its ledger since its September peak is more than the
entire market cap of Visa, the seventh largest member of the S& P 500.
Twitter, another highprofile tech stock, slumped 21.1% for the largest loss by far among stocks in the S& P 500. It also repor ted bet ter- than- expected earnings for the latest qua r t er. Investors focused instead on its growth in daily users, which fell short of analysts’ expectations.
Google’s parent company, Alphabet, was an outlier and rose 3.8% after reporting growth in digital ad spending.
A similar trend has been occurring across the market: Stocks are not getting the bounce they usually do after report
ing results that beat analysts’ expectations. And they’ve been giving investors plenty of opportunities to do so: With nearly three quarters of the S& P 500 by market value having reported, 84% of companies have beat expectations, according to Credit Suisse.
Analysts say that’s an indication that expectations may have built too high through the market’s big rally and that investors’ attention may simply be elsewhere given all the uncertainties sweeping the market.