Technology shares lead a slump in US stocks; Apple sinks

S&P 500 futures dropped 0.3 percent and Dow futures fell 0.4 percent. Germany’s DAX.GDAXI fell 0.6 percent to 11,534 points and France’s CAC 40.FCHI was down 0.5 percent at 5,079 points.

“Not only is it a huge company, there are a lot of companies that depend on Apple for their businesses”, said Chris Gaffney, president of EverBank World Markets.

Analysts expressed concern that Apple relies too much on iPhone sales and demand in China. “It probably tells us more about Apple“, Davidson said. “Earnings are going fairly well”. Australia’s S&P/ASX 200 dropped 1.6 percent to 5,614.60. The stock rose $12.51 to $178.72.

Other companies to report earnings included Chipotle Mexican Grill (+7.8 percent), Dow member Coca-Cola (-0.7 percent), GoPro (-0.6 percent), Illumina (-8.4 percent) and Whirlpool (+7.3 percent).

EARNINGS WATCH: Investors have their eye on company earnings and outlooks to get a sense of how the economy is doing. The Nasdaq tumbled nearly 8 percent before markets opened Wednesday after the three companies posted earnings that gave Wall Street reason to pause.

For the year, the company forecasted pre-tax profit for the year ending in September to soar in the range of £620 million to 660 million compared to £581 million reported in a year ago.

The dollar index, a gauge of the greenback against a basket of currencies, extended its rise after data showed USA home resales hit an eight-and-a-half-year high in June, and was last up 0.33% at 97.648.

On the United States economic front, the National Association of Realtors released a report showing a bigger than expected increase in existing home sales in June.

Yahoo fell 1.8 percent in late trading Tuesday after forecasting sales in the current quarter below analysts’ estimates, a sign Chief Executive Officer Marissa Mayer’s turnaround effort is still a work in progress. Cirrus Logic and Skyworks Solutions lost 5.2 per cent and 4.7 per cent, respectively, while Avago Technologies and NXP Semiconductors slumped more than 2.6 per cent. The FTSEurofirst 300 index of top European shares closed down 1.1 per cent after rising 9.3 per cent in the previous nine sessions.

In Europe, shares were dropping led lower by technology stocks after disappointing results from Apple, as the quarterly earnings season gathered pace in Europe and on Wall Street.

Asian stocks fell, as Hong Kong’s Hang Seng erased 0.99%, while in Tokyo the Nikkei sank 1.19%.

Yahoo was down 2.3 percent at $38.85 after it forecast lower-than-expected revenue for the current quarter as it struggles to revive its core online advertising business.

In foreign exchange, the euro slid to $1.0890 from $1.0942 late in New York on Tuesday, as dealers awaited a second Greek parliamentary vote on its vast reforms-for-cash bailout deal.

Commodity prices fell again overnight, with West Texas crude oil dipping more than 2.5 per cent to $US49.22 a barrel.

Brent crude was down 69 cents at $56.35 a barrel.

Banking stocks rose, including Dow member JPMorgan Chase (+1.4 per cent) and Bank of America and Citigroup (both +2.1 per cent). Gold was down just as much, at $1,092 per troy ounce.