Coronavirus: Apple Shares Drop as Weak Chinese Demand Weighs on Sales

• Coronavirus: Apple Shares Drop as Weak Chinese Demand Weighs on Sales

Apple Inc, the world’s most valuable company, on Tuesday, announced its sales for the first quarter will fall short of target because of the Coronavirus outbreak that crippled global supply chains and slow down demand of the iPhone in China.

The price of the company’s shares plunged by 2.4 percent immediately after the report, while stocks of its suppliers like Qualcomm Inc, Broadcom Inc, Qorvo Inc and Skyworks Solutions Inc, dipped by 1.6 percent to 2.4 percent on the same day.

Shares of other technology companies that heavily depend on China for sales also dropped, while the broader S&P technology sector lost 0.6 percent.

“The market is taking it in (its) stride, meaning that they know that this virus is going to have an impact on the supply chain but the severity of the impact is still unclear,” said Jeff Kravetz, regional investment strategist at US Bank Wealth Management.

“But investors are not overly concerned and we’re higher this year just because we’ve got an accommodative Fed, higher earnings and – when you exclude the impact of the virus – an incredibly resilient consumer.”

While the precise economic cost from the Coronavirus in China is yet unknown, hopes that the damage would only be temporary bolstered Wall Street’s main indexes to record high last week before Apple news weighed on the entire market.