A 3.5 per cent drop in Apple’s share price weighed on its technology sector peers this morning and dragged Wall Street lower.
Investors were also keeping their eye on Treasuries, which continued their recent slide, and oil’s retreat from yesterday’s 3½ year high.
Apple was down 3.3 per cent within the first hour of trade on Friday, following yesterday’s 2.8 per cent drop, after one of its major suppliers, Taiwan Semiconductor Manufacturing Company, earlier on Thursday lowered its revenue target for the current financial year.
TSMC warned second-quarter sales would be hurt by “weak demand from the mobile sector”. Analysts estimate Apple represents about one-fifth of the Taiwanese company’s revenue.
The warning from one of the industry’s biggest players continued to weigh on US semiconductor makers on Friday, with companies such as Broadcom, Intel, Texas Instruments and Advanced Micro Devices down between 1 per cent and 2.5 per cent.
The sell-off in the tech-heavy Nasdaq Composite picked up by mid-morning trade leaving it off 1.1 per cent, while the S&P 500 and Dow Jones Industrial Average were down 0.9 per cent and 0.8 per cent respectively.
Helping the Dow was a 4.1 per cent gain for General Electric, which rose after reporting quarterly earnings earlier on Friday. That was being offset by a softer performance for energy stocks in the blue-chip gauge, such as ExxonMobil and Chevron, that slid alongside the price of oil.
Brent crude was down 0.6 per cent at $72.33 a barrel, while West Texas Intermediate was off 0.6 per cent at $67.90.
US Treasuries were weaker again as yields, which move in the opposite direction to price, edged higher. The yield on the 10-year Treasury was up 2.7 basis points to 2.9415 per cent, while that on the 2-year was up 1.7 bps to 2.4532.
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