(Reuters) - U.S. stock index futures tumbled on Thursday after Apple Inc (AAPL.O) stunned investors with a rare sales warning that inflamed fears that the Sino-U.S. trade war and a slowing China economy would eat into corporate profits more than expected.

Apple’s shares sank 8.2 percent before the bell after the company slashed its holiday-quarter revenue forecast due to slowing iPhone sales in China, the first major warning with the U.S. earnings season around the corner.

“This provides solid evidence of how slowing economic growth and a trade war make the best death cocktail for sentiment,” said Naeem Aslam, chief market analyst at Think Markets UK Ltd in London.

The warning from Apple, whose stock is a member of all the three major Wall Street indexes, rocked financial markets, as investors sought safety in bonds and less risky assets.

At 7:49 a.m. ET, Dow e-minis 1YMc1 were down 324 points, or 1.39 percent. S&P 500 e-minis ESc1 were down 34.25 points, or 1.36 percent and Nasdaq 100 e-minis NQc1 were down 134 points, or 2.1 percent.

Apple’s slide is a gloomy omen for Wall Street bulls hoping for an early gift in 2019 following December’s steep selloff, which President Donald Trump has called a “glitch”.

Though the selloff has made stocks cheaper, with the S&P 500’s valuation now at 14 times expected earnings from 18 times a year earlier, earnings estimates have also been sharply cut.

Analysts on average expect S&P 500 companies to increase their earnings per share by nearly 7 percent this year, down from a forecast of 10 percent at the start of October and far below their expectations of 24 percent EPS growth for 2018, according to Refinitiv’s IBES.

Apple’s warning on China has the potential to weigh heavily on a wide variety of companies, ranging from its suppliers to companies that rely on China for a major portion of their sales.

Chipmakers, which count both Apple and China as major customers, led the decliners in early premarket trading, with Intel Corp (INTC.O), Micron Technology Inc (MU.O) and Nvidia Corp NVDA falling between 2.3 percent and 4.6 percent.

Trade bellwethers Boeing Co (BA.N) and Caterpillar Inc (CAT.N) dropped over 2 percent.

The United States and China are about one month into a 90-day tariff ceasefire to negotiate a deal. President Donald Trump said on Wednesday the talks were going “very well” and that the stock market would rise once various trade deals are settled.

Apple’s warning follows data earlier this week that showed a deceleration in factory activity in China and the euro zone, indicating the ongoing trade dispute was taking a toll on global manufacturing.

The impact on U.S. activity will be clear later on Thursday. At 10 a.m. ET, the Institute of Supply Management is expected to report its index of national factory activity fell to a reading of 57.9 in December from 59.3 in November.

Before that, at 8:15 a.m. ET, the ADP National Employment Report is expected to show private payrolls rose by 178,000 jobs in December. The report comes ahead of the more comprehensive nonfarm payrolls report on Friday.

Among stocks, Celgene Corp (CELG.O) jumped 31.9 percent after Bristol-Myers Squibb Co (BMY.N) offered to buy the drugmaker for about $74 billion in a cash-and-stock deal. Bristol-Myers fell 13.6 percent.</s>Apple is selling fewer iPhones and making less money. Blame China.

"Apple CEO Tim Cook threw China under the proverbial bus," says Brendan Ahern, CIO of KraneShares in New York. "There is little evidence that China’s economic slowdown is the primary cause of Apple’s woes," he says, adding that Cook listed other factors for weaker sales, including a strong dollar and lackluster iWatch sales. "The reality is Apple’s phones are expensive relative to local brands and when combined with a lack of significant upgrades, iPhones are simply not resonating with Chinese consumers," he says.

Newcomers Huawei and Xiaomi are gaining market share. Third quarter and year-to-date smartphone sales data from IDC show Apple has been in decline for years, losing to Samsung and local competitors. Here in the U.S., the only real competitor is Samsung. Plus phone carriers like Verizon have protected Apple by offering sweet deals to lure in customers. Apple's problems are not just because of China. Apple’s fourth quarter will show declines in the U.S. as well, likely leading to a ramp up of their share buyback program.

But Tim Cook's China comments opened a Pandora's Box for China investors and has put the trade war back in focus. Many analysts believe that the tariffs imposed on over $250 billion worth of Chinese imports will start cutting into corporate profit margins in the first quarter. Some companies have already talked about this in third quarter earnings calls.

With tax cut stimulus wearing thin, capital costs rising, and import costs going up, China is one of the biggest headwinds to the U.S. stock market.

China is also slowing on account of economic reforms and the trade dispute with Washington. A weaker China is no longer a theory concocted by the China haters.

Baidu CEO and billionaire Robin Li said "winter is coming" to the Chinese economy. The slowdown has led to hiring freezes and job cuts in the tech industry and work furloughs among state workers ahead of the Chinese New Year. Li commented on the slowdown in a letter to investors. He tried putting a positive spin on it, focusing on the long term. However, Li's comments plus Cook's comments on Apple sales equals a deteriorating China outlook.

China's economy is massive. It's stock market is not a good indicator of economic strength. The Shanghai and Shenzhen stock indexes are in bear territory, down over 30% in the last 12 months. Still, the Chinese economy is not heading for a recession.

Industrial production growth fell to 5.4% annualized in November from 5.9% in October. Nomura Securities analysts in Hong Kong led by Ting Lu said Thursday that they expect it to hold steady in December due to the positive effects of front-loading exports and the less aggressive anti-pollution push. Nomura cut their fourth-quarter GDP growth forecast today to 6.4% from 6.5%. Even discounting those numbers by 50% still has China growing, though clearly not enough for a developing economy of that size.

Retail sales growth is likely to have fallen a bit in December from the 8.1% mark in November. On trade, export and import growth might have picked up due to the trade truce as China buys more U.S. commodities.

China’s non-manufacturing PMI is still solid, hitting 53.8 in December from November’s 53.4.

The country is busy playing defense against Trump's trade war, and the cyclical slowdown. The central bank is allowing state banks to lower their reserve requirements to speed up lending to mid-sized and smaller businesses.

Meanwhile, the South China Morning Post is full of headlines this week warning of pending disaster between Beijing and Washington, despite the 90-day trade truce initiated by Xi Jinping at the G20 Summit in Argentina in November.

According to a Bloomberg report quoting two people familiar with the matter, a U.S. government delegation led by deputy U.S. Trade Representative Jeffrey Gerrish will travel to Beijing on January 7 for face-to-face trade talks. The market will be hoping for some good news to come out of those meetings.

The trade war may be part of Apple's problems. But for Washington, and for many China experts, the first shots of that trade war were started in Beijing over 17 years ago.

"China has adopted an alternative path that simply seeks to treat its market in the way in which it wants regardless of the rules or commitments made and therefore impinges on the rights of China's trading partners regardless of the rights that they have," said Charlene Barshefsky in the South China Morning Post. Barshefsky was part of the Clinton-era team that brought China into the World Trade Organization in 2001. "This is a very disturbing outcome not in China's interests, as we see China's economy was slowing before all of this trade stuff happened."</s>NEW YORK (AP) — Stocks went into a steep slide Thursday morning after Apple reported a slowdown in iPhone sales over the holidays in China, a hugely important market for the company.

The rare warning of disappointing results from Apple sent a shudder through markets and reinforced fears among investors that the world's second-largest economy is weakening.

The Dow Jones Industrial Average fell more than 600 points about an hour into trading. The broader S&P 500 index was down 2.4 percent.

Apple's stock plunged 10 percent, erasing $67 billion in value. Other big exporters, including technology and machinery companies, also took big losses.

Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets. The U.S.-China trade dispute, nearly a year old, threatens to snarl their supply lines and reduce demand for their products.

The losses deepened after a survey of U.S. manufacturers also showed signs of weakness.

In a letter to shareholders Wednesday, Apple CEO Tim Cook said iPhone demand is waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects revenue of $84 billion for the quarter. That's $7 billion less than analysts expected.

The S&P 500 dropped 60 points to 2,449. The Dow slid 642, or 2.7 percent, to 22,707. The Nasdaq, which has a high concentration of tech stocks, retreated 185 points, or 2.8 percent, to 6,482.

"For a while now there's been an adage in the markets that as long as Apple was doing fine, everyone else would be OK," said Neil Wilson, chief markets analyst at Markets.com. "Therefore, Apple's rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific?"

Apple's warning couldn't have come at a worse time for stocks given the wipeout in late 2018. Many global indexes posted their worst year in a decade amid concerns about the global economy and the prospect of further U.S. interest rate increases.

A weak report Thursday on U.S. manufacturing also weighed on the market. The Institute for Supply Management said its index of manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. Manufacturing is still growing, but at a slower pace than it has recently.

U.S. government bond prices, gold and high-dividend stocks like utilities all rose as investors looked for safer places to put their money.

Apple stock has slumped 38 percent since early October amid fears of a slowdown in China. The company also recently announced that it would stop disclosing how many iPhones it sold each quarter, a move many investors suspected was an attempt to hid disappointing news.

Apple stock had fallen to $143.58 at mid-morning. Microsoft shed 1.6 percent to $99.46. In the chip industry, Intel fell 4.1 percent to $45.17, and Qualcomm lost 2.4 percent to $56.04, while Skyworks skidded 7.6 percent to $62.77.

Among big industrial companies, Caterpillar gave up 3.5 percent to $121.90, and Deere lost 2.5 percent to $144.93.

Companies that make heavy machinery such as construction equipment are facing less demand as China's economy, the largest in the world after the U.S., loses strength. They are also dealing with higher costs for metals as a result of import taxes.

Bonds prices jumped. The yield on the 10-year Treasury note fell to 2.58 percent from 2.66 percent late Wednesday, a large move.

Markets overseas held up a bit better. Germany's DAX and the French CAC 40 both fell 1.2 percent, and Britain's FTSE 100 dipped 0.2 percent. In Asia, tech-related stocks suffered most. South Korea's Kospi ended 0.8 percent lower and Hong Kong's Hang Seng gave up 0.3 percent.

Oil prices were little changed. U.S. crude stayed at $46.52 a barrel in New York and Brent crude rose 0.4 percent to $55.13 a barrel in London. Oil prices have nosedived almost 40 percent since early October, and investors' fears about falling demand in China and elsewhere were a key reason for the decline.

The dollar weakened. It fell to 107.46 yen from 109.21 yen. The euro rose to $1.1403 from $1.344. The British pound fell to $1.2596 from $1.2690.

Gold also rose, by 0.6 percent to $1,291 an ounce.

Some experts believe that the market volatility could eventually lead to changes in the policies that are worrying investors. The Federal Reserve, for example, could slow the pace of its interest rate increases if markets continue to drop. And President Donald Trump could become more open to settling the trade dispute with China.

"It is a well-known fact that Trump perceives the markets as a true barometer of his presidency," said Piotr Matys, a strategist at Rabobank International.

Pan Pylas contributed to this story from London.

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP</s>NEW YORK — Stocks went into a steep slide Thursday after Apple sent a shudder through Wall Street with word that iPhone sales in China are falling.

The rare warning of disappointing results from Apple reinforced investors’ fears that the world’s second-biggest economy is losing steam and that trade tensions between Washington and Beijing are making things worse.

The Dow Jones Industrial Average plunged as much as 677 points about an hour into trading, then began climbing back, but was still down more than 550 points at midafternoon. The broader S&P 500 index was down 2 per cent.

Apple stock plummeted 9.5 per cent, erasing $71 billion in value. Other big exporters, including technology and heavy-machinery companies, also took big losses. Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets.

“For a while now there’s been an adage in the markets that as long as Apple was doing fine, everyone else would be OK,” said Neil Wilson, chief markets analyst at Markets.com. “Therefore, Apple’s rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific.”

Investors were also unsettled by a report Thursday that showed signs of weakness in U.S. manufacturing.

The U.S.-China trade dispute threatens to snarl multinational companies’ supply lines and reduce demand for their products. Companies such as General Motors, Caterpillar and Daimler have all said recently that trade tensions, combined with slower growth in China, were damaging their businesses.

“When the largest and second-largest economies in the world get into a trade dispute, the rest of the world’s going to feel the effects. That’s what we’re seeing now,” said Jack Ablin, chief investment officer of Cresset Wealth Advisors.

In a letter to shareholders Wednesday, Apple CEO Tim Cook said iPhone demand is waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects revenue of $84 billion for the quarter. That’s $7 billion less than analysts expected.

Apple’s warning couldn’t have come at a worse time for stocks given the wipeout in late 2018. Many global indexes posted their worst year in a decade amid concerns about the global economy and the prospect of further U.S. interest rate increases.

As of 2 p.m., the S&P 500 was down 50 points to 2,459. The Dow had slid 571 points, or 2.5 per cent, to 22,774. The Nasdaq, which has a high concentration of tech stocks, retreated 170 points, or 2.6 per cent, to 6,495.

U.S. government bond prices jumped, sending yields to their lowest level in almost a year, and gold and high-dividend stocks like utilities also rose as investors looked for safer places to put their money.

A weak report Thursday on U.S. manufacturing also weighed on the market. The Institute for Supply Management said its index of manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. Manufacturing is still growing, but at a slower pace than it has recently.

Apple stock has slumped 37.5 per cent since early October. The company also recently announced that it would stop disclosing how many iPhones it sold each quarter, a move many investors suspected was an attempt to hide bad news.

Apple stock took its biggest loss in six years Thursday and was down to $142.94 in afternoon trading. Microsoft shed 3.1 per cent to $97.95. Among chip makers, Intel fell 4.5 per cent to $44.98.

Among big industrial companies, Caterpillar gave up 3.2 per cent to $122.35, and Deere lost 2.1 per cent to $145.03. Boeing, which sells many of its planes to China, declined 4.1 per cent to $310.58.

Companies that make heavy machinery such as construction equipment are facing less demand as China’s economy, the largest in the world after the U.S., loses strength. They are also dealing with higher costs for metals as a result of tariffs.

Markets overseas also stumbled. Germany’s DAX dropped 1.5 per cent and the French CAC 40 fell 1.7 per cent, and Britain’s FTSE 100 gave up 0.6 per cent. In Asia, tech-related stocks suffered most. South Korea’s Kospi ended 0.8 per cent lower and Hong Kong’s Hang Seng gave up 0.3 per cent.

Oil prices edged higher. U.S. crude rose 0.4 per cent to $46.71 a barrel in New York and Brent crude rose 1.1 per cent to $55.50 a barrel in London. Oil prices have nosedived almost 40 per cent since early October, and investors’ fears about falling demand in China and elsewhere were a key reason for the decline.

The dollar weakened. It fell to 107.84 yen from 109.21 yen. The euro rose to $1.403 from $1.344. The British pound fell to $1.2638 from $1.2690.

Gold climbed 0.8 per cent to $1,294.80 an ounce. Silver rose 0.9 per cent to $15.80 an ounce. Copper, which is used in construction and wiring, fell 2.1 per cent to $2.57 a pound.

Pan Pylas contributed to this story from London.

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP</s>The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

NEW YORK (AP) — Stocks went into a steep slide Thursday after Apple sent a shudder through Wall Street with word that iPhone sales in China are falling.

The rare warning of disappointing results from Apple reinforced investors’ fears that the world’s second-biggest economy is losing steam and that trade tensions between Washington and Beijing are making things worse.

The Dow Jones Industrial Average plunged as much as 677 points about an hour into trading, then began climbing back, but was still down more than 600 points at 3 p.m. The broader S&P 500 index was down 2.2 percent.

Apple stock plummeted 9.7 percent, erasing $72 billion in value. Other big exporters, including technology and heavy-machinery companies, also took big losses. Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets.

“For a while now there’s been an adage in the markets that as long as Apple was doing fine, everyone else would be OK,” said Neil Wilson, chief markets analyst at Markets.com. “Therefore, Apple’s rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific.”

Investors were also unsettled by a report Thursday that showed signs of weakness in U.S. manufacturing.

The U.S.-China trade dispute threatens to snarl multinational companies’ supply lines and reduce demand for their products. Companies such as General Motors, Caterpillar and Daimler have all said recently that trade tensions, combined with slower growth in China, were damaging their businesses.

“When the largest and second-largest economies in the world get into a trade dispute, the rest of the world’s going to feel the effects. That’s what we’re seeing now,” said Jack Ablin, chief investment officer of Cresset Wealth Advisors.

In a letter to shareholders Wednesday, Apple CEO Tim Cook said iPhone demand is waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects revenue of $84 billion for the quarter. That’s $7 billion less than analysts expected.

Cook’s comments echoed the concerns that have pushed investors to sell stocks over the last three months. Markets were wiped out in late 2018 and many global indexes posted their worst year in a decade amid concerns about the global economy and the prospect of further U.S. interest rate increases.

The S&P 500 was down 54 points to 2,455. The Dow slid 602 points, or 2.6 percent, to 22,743. The Nasdaq, which has a high concentration of tech stocks, retreated 180 points, or 2.7 percent, to 6,485.

U.S. government bond prices jumped, sending yields to their lowest level in almost a year, and gold and high-dividend stocks like utilities also rose as investors looked for safer places to put their money.

A weak report Thursday on U.S. manufacturing also weighed on the market. The Institute for Supply Management said its index of manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. Manufacturing is still growing, but at a slower pace than it has recently.

Apple’s stock has slumped 38 percent since early October. The company also recently announced that it would stop disclosing how many iPhones it sold each quarter, a move many investors suspected was an attempt to hide bad news.

Apple took its biggest loss in six years Thursday and was down to $142.66 in afternoon trading. Microsoft shed 3.3 percent to $97.79. Among chip makers, Intel fell 4.8 percent to $44.80.

Among big industrial companies, Caterpillar gave up 3.8 percent to $121.64, and Deere lost 2.4 percent to $144.52. Boeing, which sells many of its planes to China, declined 3.9 percent to $311.02.

Companies that make heavy machinery such as construction equipment are facing less demand as China’s economy, the largest in the world after the U.S., loses strength. They are also dealing with higher costs for metals as a result of tariffs.

Markets overseas also stumbled. Germany’s DAX dropped 1.5 percent and the French CAC 40 fell 1.7 percent, and Britain’s FTSE 100 gave up 0.6 percent. In Asia, tech-related stocks suffered most. South Korea’s Kospi ended 0.8 percent lower and Hong Kong’s Hang Seng gave up 0.3 percent.

Oil prices edged higher. U.S. crude rose 1.2 percent to $47.09 a barrel in New York and Brent crude rose 1.9 percent to $55.95 a barrel in London. Oil prices have nosedived almost 40 percent since early October, and investors’ fears about falling demand in China and elsewhere were a key reason for the decline.

The dollar weakened. It fell to 107.78 yen from 109.21 yen. The euro rose to $1.1394 from $1.344. The British pound fell to $1.2633 from $1.2690.

Gold climbed 0.8 percent to $1,294.80 an ounce. Silver rose 0.9 percent to $15.80 an ounce. Copper, which is used in construction and wiring, fell 2.1 percent to $2.57 a pound.

In other commodities trading, wholesale gasoline rose 1.8 percent to $1.35 a gallon and heating oil climbed 2.4 percent to $1.74 a gallon. Natural gas fell 0.4 percent to $2.95 per 1,000 cubic feet.

Pan Pylas contributed to this story from London.

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP

The Associated Press contributed to this report.

We are committed to truth and accuracy in all of our journalism. Read our editorial standards.</s>NEW YORK (AP) — Stocks went into a steep slide Thursday morning after Apple reported a slowdown in iPhone sales over the holidays in China, a hugely important market for the company.

The rare warning of disappointing results from Apple sent a shudder through markets and reinforced fears among investors that the world's second-largest economy is weakening.

The Dow Jones Industrial Average fell more than 600 points about an hour into trading. The broader S&P 500 index was down 2.4 percent.

Apple's stock plunged 10 percent, erasing $67 billion in value. Other big exporters, including technology and machinery companies, also took big losses.

Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets. The U.S.-China trade dispute, nearly a year old, threatens to snarl their supply lines and reduce demand for their products.

The losses deepened after a survey of U.S. manufacturers also showed signs of weakness.

In a letter to shareholders Wednesday, Apple CEO Tim Cook said iPhone demand is waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects revenue of $84 billion for the quarter. That's $7 billion less than analysts expected.

The S&P 500 dropped 60 points to 2,449. The Dow slid 642, or 2.7 percent, to 22,707. The Nasdaq, which has a high concentration of tech stocks, retreated 185 points, or 2.8 percent, to 6,482.

"For a while now there's been an adage in the markets that as long as Apple was doing fine, everyone else would be OK," said Neil Wilson, chief markets analyst at Markets.com. "Therefore, Apple's rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific?"

Apple's warning couldn't have come at a worse time for stocks given the wipeout in late 2018. Many global indexes posted their worst year in a decade amid concerns about the global economy and the prospect of further U.S. interest rate increases.

A weak report Thursday on U.S. manufacturing also weighed on the market. The Institute for Supply Management said its index of manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. Manufacturing is still growing, but at a slower pace than it has recently.

U.S. government bond prices, gold and high-dividend stocks like utilities all rose as investors looked for safer places to put their money.

Apple stock has slumped 38 percent since early October amid fears of a slowdown in China. The company also recently announced that it would stop disclosing how many iPhones it sold each quarter, a move many investors suspected was an attempt to hid disappointing news.

Apple stock had fallen to $143.58 at mid-morning. Microsoft shed 1.6 percent to $99.46. In the chip industry, Intel fell 4.1 percent to $45.17, and Qualcomm lost 2.4 percent to $56.04, while Skyworks skidded 7.6 percent to $62.77.

Among big industrial companies, Caterpillar gave up 3.5 percent to $121.90, and Deere lost 2.5 percent to $144.93.

Companies that make heavy machinery such as construction equipment are facing less demand as China's economy, the largest in the world after the U.S., loses strength. They are also dealing with higher costs for metals as a result of import taxes.

Bonds prices jumped. The yield on the 10-year Treasury note fell to 2.58 percent from 2.66 percent late Wednesday, a large move.

Markets overseas held up a bit better. Germany's DAX and the French CAC 40 both fell 1.2 percent, and Britain's FTSE 100 dipped 0.2 percent. In Asia, tech-related stocks suffered most. South Korea's Kospi ended 0.8 percent lower and Hong Kong's Hang Seng gave up 0.3 percent.

Oil prices were little changed. U.S. crude stayed at $46.52 a barrel in New York and Brent crude rose 0.4 percent to $55.13 a barrel in London. Oil prices have nosedived almost 40 percent since early October, and investors' fears about falling demand in China and elsewhere were a key reason for the decline.

The dollar weakened. It fell to 107.46 yen from 109.21 yen. The euro rose to $1.1403 from $1.344. The British pound fell to $1.2596 from $1.2690.

Gold also rose, by 0.6 percent to $1,291 an ounce.

Some experts believe that the market volatility could eventually lead to changes in the policies that are worrying investors. The Federal Reserve, for example, could slow the pace of its interest rate increases if markets continue to drop. And President Donald Trump could become more open to settling the trade dispute with China.

"It is a well-known fact that Trump perceives the markets as a true barometer of his presidency," said Piotr Matys, a strategist at Rabobank International.

Pan Pylas contributed to this story from London.

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP</s>NEW YORK (AP) — Stocks went into a steep slide Thursday morning after Apple reported a slowdown in iPhone sales over the holidays in China, a hugely important market for the company.

The rare warning from Apple sent a shudder through markets and confirmed fears among investors that the world's second-largest economy was weakening.

The Dow Jones Industrial Average fell more than 600 points about an hour into trading.

Apple's stock plunged 10 percent, erasing $67 billion in value. Other big exporters including technology and machinery companies also took big losses.

Some of the worst drops went to chipmakers that make components used in smartphones and other gadgets. The trade dispute, nearly a year old, threatens to snarl their supply lines and reduce demand for their products. Tariffs and other trade sanctions could add to their difficulties.

The losses deepened after a survey of U.S. manufacturers also showed signs of weakness. The benchmark S&P 500 index was down 2.4 percent as of 10:45 a.m.

In a letter to shareholders on Wednesday, Apple CEO Tim Cook said iPhone demand was waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects revenue of $84 billion for the quarter. That's $7 billion less than analysts expected, according to FactSet.

Apple's warning, its first since 2002, deepened concerns about the Chinese economy, which had been showing signs of stress.

The S&P 500 dropped 60 points to 2,449. The Dow slid 642, or 2.7 percent to 22,707. The Nasdaq composite, which has a high concentration of tech stocks, retreated 185 points, or 2.8 percent, to 6,482.

"For a while now there's been an adage in the markets that as long as Apple was doing fine, everyone else would be OK," said Neil Wilson, chief markets analyst at Markets.com. "Therefore, Apple's rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific?"

Apple's warning couldn't have come at a worse time for stock market investors given the wipeout in late 2018, when many global indexes posted their worst performances in a decade amid concerns about the global economy and the prospect of further U.S. interest rate hikes.

A weak report on U.S. manufacturing was also weighing on the market. The Institute for Supply Management said its index of manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. Manufacturing is still growing, but at a slower pace than it has recently.

In times of market stress and volatility, there are some assets that traditionally do well as investors perceive them as safer to hold. U.S. government bond prices, gold and high-dividend stocks like utilities all rose.

Apple stock has slumped 38 percent since early October as investors feared a sales slowdown in China. The company also recently announced that it would stop disclosing how many iPhones it sold each quarter, and many investors felt that suggested the company was trying to hide signs that its sales were cooling off. Its stock fell to $143.58.

Other major tech companies have also taken huge losses over the last three months as the market endured its worst slump in almost a decade. While stocks rebounded slightly at the end of 2018, Apple's troubles added to their losses Thursday. Microsoft shed 1.6 percent to $99.46. In the chip industry, Intel fell 4.1 percent to $45.17 and Qualcomm lost 2.4 percent to $56.04 while Skyworks skidded 7.6 percent to $62.77.

Among big industrial companies, Caterpillar gave up 3.5 percent to $121.90 and Deere lost 2.5 percent to $144.93. Companies that make heavy machines like construction equipment are facing less demand as China's economy, the largest in the world after the U.S., loses strength. They're also dealing with higher costs for metals as a result of import taxes.

Bonds prices jumped. The yield on the 10-year Treasury note fell to 2.58 percent from 2.66 percent late Wednesday, a large move.

Markets overseas held up a bit better. Germany's DAX and the French CAC 40 both fell 1.2 percent, and Britain's FTSE 100 dipped 0.2 percent. In Asia, tech-related stocks suffered most. South Korea's Kospi ended 0.8 percent lower and Hong Kong's Hang Seng gave up 0.3 percent.

Oil prices were little changed. U.S. crude stayed at $46.52 a barrel in New York and Brent crude rose 0.4 percent to $55.13 a barrel in London. Oil prices have nosedived almost 40 percent since early October, and investors' fears about falling demand in China and elsewhere were a key reason for the decline.

The dollar weakened. It fell to 107.46 yen from 109.21 yen. The euro rose to $1.1403 from $1.344. The British pound fell to $1.2596 from $1.2690.

Gold also rose, by 0.6 percent to $1,291 an ounce.

Some experts believe that the market volatility could eventually lead to changes in the policies that are concerning investors. The Fed, for example, could slow the pace of its interest rate increases if markets continue to drop. And U.S. President Donald Trump could become more open to settling the trade dispute with China.

"It is a well-known fact that Trump perceives the markets as a true barometer of his presidency," said Piotr Matys, a strategist at Rabobank International.

Pan Pylas contributed to this story from London.

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP</s>NEW YORK (AP) — Stocks went into a steep slide Thursday morning after Apple reported a slowdown in iPhone sales over the holidays in China, a hugely important market for the company.

The rare warning of disappointing results from Apple sent a shudder through markets and reinforced fears among investors that the world's second-largest economy is weakening.

The Dow Jones Industrial Average fell more than 600 points about an hour into trading. The broader S&P 500 index was down 2.4 percent.

Apple's stock plunged 10 percent, erasing $67 billion in value. Other big exporters, including technology and machinery companies, also took big losses.

Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets. The U.S.-China trade dispute, nearly a year old, threatens to snarl their supply lines and reduce demand for their products.

The losses deepened after a survey of U.S. manufacturers also showed signs of weakness.

In a letter to shareholders Wednesday, Apple CEO Tim Cook said iPhone demand is waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects revenue of $84 billion for the quarter. That's $7 billion less than analysts expected.

The S&P 500 dropped 60 points to 2,449. The Dow slid 642, or 2.7 percent, to 22,707. The Nasdaq, which has a high concentration of tech stocks, retreated 185 points, or 2.8 percent, to 6,482.

"For a while now there's been an adage in the markets that as long as Apple was doing fine, everyone else would be OK," said Neil Wilson, chief markets analyst at Markets.com. "Therefore, Apple's rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific?"

Apple's warning couldn't have come at a worse time for stocks given the wipeout in late 2018. Many global indexes posted their worst year in a decade amid concerns about the global economy and the prospect of further U.S. interest rate increases.

A weak report Thursday on U.S. manufacturing also weighed on the market. The Institute for Supply Management said its index of manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. Manufacturing is still growing, but at a slower pace than it has recently.

U.S. government bond prices, gold and high-dividend stocks like utilities all rose as investors looked for safer places to put their money.

Apple stock has slumped 38 percent since early October amid fears of a slowdown in China. The company also recently announced that it would stop disclosing how many iPhones it sold each quarter, a move many investors suspected was an attempt to hid disappointing news.

Apple stock had fallen to $143.58 at mid-morning. Microsoft shed 1.6 percent to $99.46. In the chip industry, Intel fell 4.1 percent to $45.17, and Qualcomm lost 2.4 percent to $56.04, while Skyworks skidded 7.6 percent to $62.77.

Among big industrial companies, Caterpillar gave up 3.5 percent to $121.90, and Deere lost 2.5 percent to $144.93.

Companies that make heavy machinery such as construction equipment are facing less demand as China's economy, the largest in the world after the U.S., loses strength. They are also dealing with higher costs for metals as a result of import taxes.

Bonds prices jumped. The yield on the 10-year Treasury note fell to 2.58 percent from 2.66 percent late Wednesday, a large move.

Markets overseas held up a bit better. Germany's DAX and the French CAC 40 both fell 1.2 percent, and Britain's FTSE 100 dipped 0.2 percent. In Asia, tech-related stocks suffered most. South Korea's Kospi ended 0.8 percent lower and Hong Kong's Hang Seng gave up 0.3 percent.

Oil prices were little changed. U.S. crude stayed at $46.52 a barrel in New York and Brent crude rose 0.4 percent to $55.13 a barrel in London. Oil prices have nosedived almost 40 percent since early October, and investors' fears about falling demand in China and elsewhere were a key reason for the decline.

The dollar weakened. It fell to 107.46 yen from 109.21 yen. The euro rose to $1.1403 from $1.344. The British pound fell to $1.2596 from $1.2690.

Gold also rose, by 0.6 percent to $1,291 an ounce.

Some experts believe that the market volatility could eventually lead to changes in the policies that are worrying investors. The Federal Reserve, for example, could slow the pace of its interest rate increases if markets continue to drop. And President Donald Trump could become more open to settling the trade dispute with China.

"It is a well-known fact that Trump perceives the markets as a true barometer of his presidency," said Piotr Matys, a strategist at Rabobank International.

Pan Pylas contributed to this story from London.

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP</s>(Reuters) - U.S. stock index futures tumbled on Thursday after Apple Inc (AAPL.O) stunned investors with a rare sales warning that inflamed fears that the Sino-U.S. trade war and a slowing China economy would eat into corporate profits more than expected.

Apple’s shares sank 8.2 percent before the bell after the company slashed its holiday-quarter revenue forecast due to slowing iPhone sales in China, the first major warning with the U.S. earnings season around the corner.

“This provides solid evidence of how slowing economic growth and a trade war make the best death cocktail for sentiment,” said Naeem Aslam, chief market analyst at Think Markets UK Ltd in London.

The warning from Apple, whose stock is a member of all the three major Wall Street indexes, rocked financial markets, as investors sought safety in bonds and less risky assets.

At 7:49 a.m. ET, Dow e-minis 1YMc1 were down 324 points, or 1.39 percent. S&P 500 e-minis ESc1 were down 34.25 points, or 1.36 percent and Nasdaq 100 e-minis NQc1 were down 134 points, or 2.1 percent.

Apple’s slide is a gloomy omen for Wall Street bulls hoping for an early gift in 2019 following December’s steep selloff, which President Donald Trump has called a “glitch”.

Though the selloff has made stocks cheaper, with the S&P 500’s valuation now at 14 times expected earnings from 18 times a year earlier, earnings estimates have also been sharply cut.

Analysts on average expect S&P 500 companies to increase their earnings per share by nearly 7 percent this year, down from a forecast of 10 percent at the start of October and far below their expectations of 24 percent EPS growth for 2018, according to Refinitiv’s IBES.

Apple’s warning on China has the potential to weigh heavily on a wide variety of companies, ranging from its suppliers to companies that rely on China for a major portion of their sales.

Chipmakers, which count both Apple and China as major customers, led the decliners in early premarket trading, with Intel Corp (INTC.O), Micron Technology Inc (MU.O) and Nvidia Corp NVDA falling between 2.3 percent and 4.6 percent.

Trade bellwethers Boeing Co (BA.N) and Caterpillar Inc (CAT.N) dropped over 2 percent.

The United States and China are about one month into a 90-day tariff ceasefire to negotiate a deal. President Donald Trump said on Wednesday the talks were going “very well” and that the stock market would rise once various trade deals are settled.

Apple’s warning follows data earlier this week that showed a deceleration in factory activity in China and the euro zone, indicating the ongoing trade dispute was taking a toll on global manufacturing.

The impact on U.S. activity will be clear later on Thursday. At 10 a.m. ET, the Institute of Supply Management is expected to report its index of national factory activity fell to a reading of 57.9 in December from 59.3 in November.

Before that, at 8:15 a.m. ET, the ADP National Employment Report is expected to show private payrolls rose by 178,000 jobs in December. The report comes ahead of the more comprehensive nonfarm payrolls report on Friday.

Among stocks, Celgene Corp (CELG.O) jumped 31.9 percent after Bristol-Myers Squibb Co (BMY.N) offered to buy the drugmaker for about $74 billion in a cash-and-stock deal. Bristol-Myers fell 13.6 percent.</s>NEW YORK (AP) — Stocks went into a steep slide Thursday morning after Apple reported a slowdown in iPhone sales over the holidays in China, a hugely important market for the company.

The rare warning of disappointing results from Apple sent a shudder through markets and reinforced fears among investors that the world's second-largest economy is weakening.

The Dow Jones Industrial Average fell more than 600 points about an hour into trading. The broader S&P 500 index was down 2.4 percent.

Apple's stock plunged 10 percent, erasing $67 billion in value. Other big exporters, including technology and machinery companies, also took big losses.

Some of the worst drops were at chipmakers that make components used in smartphones and other gadgets. The U.S.-China trade dispute, nearly a year old, threatens to snarl their supply lines and reduce demand for their products.

The losses deepened after a survey of U.S. manufacturers also showed signs of weakness.

In a letter to shareholders Wednesday, Apple CEO Tim Cook said iPhone demand is waning in China and would hurt revenue for the October-December quarter. Cook said Apple expects revenue of $84 billion for the quarter. That's $7 billion less than analysts expected.

The S&P 500 dropped 60 points to 2,449. The Dow slid 642, or 2.7 percent, to 22,707. The Nasdaq, which has a high concentration of tech stocks, retreated 185 points, or 2.8 percent, to 6,482.

"For a while now there's been an adage in the markets that as long as Apple was doing fine, everyone else would be OK," said Neil Wilson, chief markets analyst at Markets.com. "Therefore, Apple's rare profit warning is a red flag for market watchers. The question is to what extent this is more Apple-specific?"

Apple's warning couldn't have come at a worse time for stocks given the wipeout in late 2018. Many global indexes posted their worst year in a decade amid concerns about the global economy and the prospect of further U.S. interest rate increases.

A weak report Thursday on U.S. manufacturing also weighed on the market. The Institute for Supply Management said its index of manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. Manufacturing is still growing, but at a slower pace than it has recently.

U.S. government bond prices, gold and high-dividend stocks like utilities all rose as investors looked for safer places to put their money.

Apple stock has slumped 38 percent since early October amid fears of a slowdown in China. The company also recently announced that it would stop disclosing how many iPhones it sold each quarter, a move many investors suspected was an attempt to hid disappointing news.

Apple stock had fallen to $143.58 at mid-morning. Microsoft shed 1.6 percent to $99.46. In the chip industry, Intel fell 4.1 percent to $45.17, and Qualcomm lost 2.4 percent to $56.04, while Skyworks skidded 7.6 percent to $62.77.

Among big industrial companies, Caterpillar gave up 3.5 percent to $121.90, and Deere lost 2.5 percent to $144.93.

Companies that make heavy machinery such as construction equipment are facing less demand as China's economy, the largest in the world after the U.S., loses strength. They are also dealing with higher costs for metals as a result of import taxes.

Bonds prices jumped. The yield on the 10-year Treasury note fell to 2.58 percent from 2.66 percent late Wednesday, a large move.

Markets overseas held up a bit better. Germany's DAX and the French CAC 40 both fell 1.2 percent, and Britain's FTSE 100 dipped 0.2 percent. In Asia, tech-related stocks suffered most. South Korea's Kospi ended 0.8 percent lower and Hong Kong's Hang Seng gave up 0.3 percent.

Oil prices were little changed. U.S. crude stayed at $46.52 a barrel in New York and Brent crude rose 0.4 percent to $55.13 a barrel in London. Oil prices have nosedived almost 40 percent since early October, and investors' fears about falling demand in China and elsewhere were a key reason for the decline.

The dollar weakened. It fell to 107.46 yen from 109.21 yen. The euro rose to $1.1403 from $1.344. The British pound fell to $1.2596 from $1.2690.

Gold also rose, by 0.6 percent to $1,291 an ounce.

Some experts believe that the market volatility could eventually lead to changes in the policies that are worrying investors. The Federal Reserve, for example, could slow the pace of its interest rate increases if markets continue to drop. And President Donald Trump could become more open to settling the trade dispute with China.

"It is a well-known fact that Trump perceives the markets as a true barometer of his presidency," said Piotr Matys, a strategist at Rabobank International.

Pan Pylas contributed to this story from London.

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP
The Dow Jones Industrial Average drops 660 points following a warning from Apple on weak demand and trade relations between the United States and China.