January 3, 2019 / 6:05 PM / 6 months ago

GLOBAL MARKETS-Apple's shock warning sends investors to safe-haven assets

* U.S., European shares rattled by Apple revenue warning

* Wall Street further hurt by weak U.S. factory data

* Yen soars against dollar; Treasuries, gold rise (Updates to close of European markets, changes byline, dateline, previous LONDON)

By April Joyner

NEW YORK, Jan 3 (Reuters) - A revenue warning from Apple Inc rocked equity markets around the globe on Thursday as concerns over a damaging Sino-U.S. trade battle and its impact on world economic growth boosted assets considered safer investments, such as bonds and the Japanese yen.

Technology stocks led a selloff in Asian, European and U.S. stock markets after Apple, blaming weaker iPhone sales in China, cut its revenue forecast for the first time in nearly 12 years. Apple’s U.S.-listed shares were last down 8.1 percent.

That heightened concerns that sluggish global growth may be reflected in the United States, where corporate earnings season is set to kick off in a few weeks.

Survey data from the Institute of Supply Management showed U.S. factory activity slowed more than expected in December, sending stocks on Wall Street lower.

“That negative economic data, combined with the PMI (data) in China a couple of days ago, reconfirms the market’s concerns that the global economy is slowing,” said Jeremy Zirin, head of equities at UBS Global Wealth Management’s Chief Investment Office.

Zirin said Apple’s warning “raises concerns that we could see a broad-based weakness among companies with a high level of exposure to China.”

Treasury yields fell and prices surged after the U.S. manufacturing activity data, extending overnight losses prompted by the Apple warning that sent investors fleeing to safe-haven instruments.

The benchmark 10-year U.S. government note yield fell to a session low of 2.58 percent, a more than 50 percent retracement from its 2018 high. The two-year Treasury yield fell to its lowest since June 7 and was down 6.9 basis points at 2.44 percent.

German government bond yields also reached their lowest level in more than two years.

In the U.S. equity market, the Dow Jones Industrial Average fell 424.47 points, or 1.82 percent, to 22,921.77, the S&P 500 lost 36.25 points, or 1.44 percent, to 2,473.78 and the Nasdaq Composite dropped 124.94 points, or 1.87 percent, to 6,541.00.

MSCI’s gauge of stocks across the globe shed 0.81 percent, while in Europe, the STOXX 600 ended down 0.98 percent.


Apple’s news also roiled the currency markets, with the safe-haven yen climbing against the dollar. The dollar was last 0.88 percent lower against the yen at 107.91 yen.

The dollar touched its lowest level against the yen since March 2018, while the Australian dollar at one point hit levels against the Japanese yen not seen since 2011.

The dollar index, measuring it against a basket of six other currencies, was last down 0.6 percent. The euro rose 0.51 percent against the dollar to $1.14.

Keeping with the risk-off theme, gold prices hit a 6-1/2-month peak. Spot gold last added 0.4 percent to $1,289.56 an ounce.

Copper prices dropped to an 18-month low and ended 1.8 percent lower at $5,736 a tonne.

Brent crude futures rose 38 cents, or 0.7 percent, to $55.29 a barrel. U.S. crude futures rose 14 cents to $46.68 a barrel, a 0.3 percent gain.

Reporting by April Joyner; Additional reporting by Andrew Galbraith, Josephine Mason, Helen Reid and Saqib Iqbal Ahmed; Editing by Bernadette Baum

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