US stocks have closed sharply lower in the wake of disappointing earnings reports and a 5.5 per cent plunge in Apple shares, along with dreary economic sentiment in Europe.
The Dow Jones Industrial Average dropped 138.19 (0.94 per cent) to 14,618.59.
The broad-based S&P 500 sank 22.56 (1.43 per cent) to 1552.01, while the Nasdaq Composite Index nose-dived 59.96 (1.84 per cent) to 3204.67.
A disappointing earnings report from Bank of America sent it and other banking shares lower.
Apple plunged after a supplier slashed its profit guidance, suggesting, analysts said, slow iPhone and iPad sales at Apple itself.
The US retreat followed equity losses in Europe amid speculation of a German credit rating downgrade and comment by the head of the Bundesbank predicting that Europe’s recovery could take a decade.
Peter Cecchini, chief macro strategist at Cantor Fitzgerald, said the market sell-off came on the heels of “fairly weak” global economic data and US economic reports that have “not been great.”
Bank of America plummeted 4.7 per cent after missing earnings expectations and reporting lower revenues in its consumer and business banking unit due to the low interest-rate environment. Losses also deepened in the consumer real estate unit.
Other banks lost ground. JPMorgan Chase sank 3.5 per cent, Wells Fargo lost 1.4 per cent and Goldman Sachs slid 2.4 per cent.
Apple plummeted 5.5 per cent after Cirrus Logic forecast lower quarterly revenues. Cirrus, a supplier of audio components for iPads and iPhones, lost 15.7 per cent.
Mining and metals companies continued to suffer as copper plunged to its lowest level in more than a year. Freeport-McMoRan Copper & Gold dropped 4.3 per cent while Barrick Gold fell 6.4 per cent. Newmont Mining fell 4.2 per cent.
Toy company Mattel offered a rare bit of good news, gaining 1.9 per cent after reporting a more than a four-fold increase in profits. Company chief executive Bryan Stockton touted strong results in its American Girl doll sales “across all regions, particularly Europe.”
Bond prices rose. The yield on the 10-year Treasury slipped to 1.70 per cent from 1.72 per cent late on Tuesday, while the 30-year yield dropped to 2.89 per cent from 2.90 per cent. Bond prices move inversely to yields.
