Wall Street fell overnight amid concern that stock market darling Apple is facing headwinds, fanning concern that other companies might struggle with demand for their products and services too.
Shares of Apple sank on reports that it's slowing down production of its iPhone 5, increasing worries the appeal of some of its products is waning. The stock was last down 3.3 per cent at US$503.35, compared with a record high of US$705 reached in September.
Apple slashed its original target to order 65 million iPhone 5 displays this quarter by about half, Nikkei reported, citing an unidentified senior executive at a component maker it didn't name.
"Apple is the story for the market," James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, told Bloomberg News. "It brings fear that if Apple's doing something, the other companies and industries would be doing the same. That makes it even more important for investors to watch corporate guidance or CEO's expectations."
Fourth-quarter earnings expectations are extremely modest. Overall earnings are expected to increase by 1.9 per cent in this reporting period, according to Thomson Reuters data.