AP Photo/Richard Drew
- Stocks tumbled on Tuesday after Apple warned Wuhan coronavirus is hitting sales.
- The iPhone maker doesn’t expect to hit its quarterly revenue target as the outbreak is hampering production and hurting demand.
- HSBC’s disappointing earnings and restructuring plans also weighed on market sentiment.
- The banking giant’s profits fell 33% last year and it intends to eliminate 35,000 jobs by 2022.
- Visit Business Insider’s homepage for more stories.
Global stocks tanked on Tuesday after Apple warned Wuhan coronavirus is hammering sales, and HSBC posted weak earnings and outlined plans to cut 35,000 jobs by 2022.
Apple told investors on Monday that it doesn’t expect to hit its second-quarter revenue target of $63 billion to $67 billion. The warning sent its shares down 3.4% in pre-market trading, wiping $48 billion off its market capitalization.
The iPhone maker explained its manufacturing facilities in China are ramping up more slowly than it anticipated due to the disruption caused by the virus.
The outbreak also forced it to temporarily close all of its stores in the country, the company said. Those that have reopened are operating with reduced hours and experiencing very low customer traffic.
Wuhan coronavirus — which has infected 72,000 people and killed nearly 1,900 across more than 25 countries — threatens to weigh on other companies’ sales and production.
“Apple has neatly summed up the knock to global growth stemming from both reduced output and consumption,” Neil Wilson, chief market analyst for Markets.com, said in a morning note.
Disappointing full-year earnings from HSBC didn’t help market sentiment. The banking titan revealed a 33% plunge in pre-tax profits and detailed plans to cut 35,000 jobs — about 15% of its global workforce — as part of its efforts to unearth $4.5 billion in cost savings by 2022, Reuters reported.
“This is as far-reaching an overhaul as you could have imagined and one that’s essentially seeing it walk away from investment banking in the US and Europe,” Wilson said.
HSBC stock slumped 6% in early trading in London, wiping close to $10 billion from the company’s market cap.
Here’s the market roundup as of 9:30 a.m. in London (4:30 a.m. in New York):
- European stocks have dropped. Germany’s DAX slid 0.8%, Britain’s FTSE 100 slid 0.6%, and the Euro Stoxx 50 slumped 0.6%.
- Asian indexes were broadly lower. China’s Shanghai Composite rose 0.1%, but Hong Kong’s Hang Seng tumbled 1.6%, and Japan’s Nikkei fell 1.4%.
- US stocks are set to open lower. Futures underlying the Dow Jones Industrial Average and S&P 500 fell 0.5% to 0.6%, and Nasdaq futures dropped 0.9%.
- Oil prices dropped. West Texas Intermediate slid 1.6% to $51.50, while Brent crude fell 1.8% to $56.60 a barrel.
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