Wall Street drops, weighed down by Apple and China worries
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U.S. stocks ended sharply lower on Monday after protests in major Chinese cities against strict COVID-19 policies sparked concerns about economic growth, while Apple Inc AAPL slid on worries about a hit to iPhone production.
Shares of the Cupertino, California tech giant weighed heavily on the benchmark S&P 500 SPX index as worker unrest at the world's biggest iPhone factory in China fanned fears of a deeper hit to the already constrained production of
Rare protests in major Chinese cities over the weekend against the country's strict zero-COVID curbs are exacerbating worries about growth in the world's second-largest economy.
"These protests are just evidence that this is a kind of a moving target where, will China continue to try to really constrain COVID's spread?" said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis.
"Or will they have more of a 'living with COVID' approach that we've seen in the United States and other countries?"
"We think COVID itself and China's policy is one of the key variables for 2023 that would influence stock prices and investors," Hainlin said.
U.S. shares of Pinduoduo Inc PDD surged after the Chinese e-commerce platform beat estimates for third-quarter revenue, helped by COVID-related lockdowns in the country that forced consumers to shop online. U.S. shares of other Chinese technology companies also rose, with Baidu BIDU and Tencent Holdings 700 each gaining over 2%.
According to preliminary data, the S&P 500 SPX lost 61.29 points, or 1.52%, to end at 3,964.83 points, while the Nasdaq Composite IXIC lost 173.01 points, or 1.54%, at 11,053.35. The Dow Jones Industrial Average DJI fell 495.95 points, or 1.44%, to 33,851.08.
With two trading days left in November, the S&P 500 is on track for a gain of over 2% for the month.
This week, investors will keep a close watch on November U.S. consumer confidence data, due on Tuesday; the government's second estimate for third-quarter gross domestic product, due on Wednesday; and November nonfarm payrolls due on Friday.