Dow drops 660 points as Apple tanks after China warning

U.S. stocks got slammed across the board on Thursday as investors reacted to Apple’s rare guidance cut and amid rising concerns that the U.S. economy may face new headwinds in 2019.

Ticker Security Last Change Change %
AAPL APPLE INC. 172.69 -3.86 -2.19%

Apple slid nearly 10 percent registering its worst day in six years wiping out $74.6 billion in market cap. By comparison that number mirrors the size of General Electric, Morgan Stanley and Caterpillar. The iPhone maker was also responsible for the bulk of the Dow Jones Industrial Average’s 660 point loss, as well as the declines in the S&P 500 and Nasdaq Composite which dropped over 2 percent. The Dow and the S&P 500 are off to the worst start for a year since 2000, according to the Dow Jones Market Data Group.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 37735.11 -248.13 -0.65%
SP500 S&P 500 5061.82 -61.59 -1.20%
I:COMP NASDAQ COMPOSITE INDEX 15885.018605 -290.08 -1.79%

Apple CEO Tim Cook, in a letter to shareholders released after markets closed Wednesday, attributed most of the expected revenue drop to lower iPhone sales, China’s slowing economy and trade tensions between China and the U.S.

Additionally, a weak report from the Institute for Supply Management (ISM) on manufacturing last month also weighed on stocks: The ISM manufacturing purchasing managers index fell in December from the previous month's level by 5.2 percentage points to 54.1 percent.

Ticker Security Last Change Change %
AAPL APPLE INC. 172.69 -3.86 -2.19%
SWKS SKYWORKS SOLUTIONS INC. 100.24 -1.31 -1.29%
CRUS CIRRUS LOGIC INC. 86.97 -1.59 -1.80%

Besides Apple shares -- which have fallen to a 18-month low -- its suppliers, including STMicroelectronics, Cirrus Logic and Lumentum, also lost value.

Stocks plummeted despite a strong ADP report on private-sector employment, which showed that last month the U.S. economy added 271,000 jobs, well ahead of the 178,000 analysts had expected.

It was the largest increase in payrolls in almost two years, with small businesses seeing the strongest month of job growth all year. Mark Zandi, chief economist at Moody’s Analytics, which helps compile the report for ADP, said that at the current pace of job growth, the nation's already low unemployment will get even lower. The report is a positive sign for the monthly jobs report due on Friday. Economists expect that U.S. employers added 177,000 new jobs with the unemployment rate holding at 3.7 percent, a 50 year low, as noted by FOX Business.

Airline stocks also took a hit after Delta disclosed that December ticket demand was not as strong as anticipated and that may mean the key holiday travel season won't be as profitable as expected. Rival airlines fell in tandem.

Ticker Security Last Change Change %
DAL DELTA AIR LINES INC. 46.65 -0.21 -0.45%
LUV SOUTHWEST AIRLINES CO. 27.84 +0.30 +1.09%
ALK ALASKA AIR GROUP INC. 40.98 -0.32 -0.77%

In merger news, a blockbuster pharma deal with Bristol-Myers paying about $74 billion for Celegene to firm its position in the cancer market.

Ticker Security Last Change Change %
BMY BRISTOL MYERS SQUIBB CO. 48.51 +0.23 +0.48%
CELG n.a. n.a. n.a. n.a.

In Asian market trading, China’s Shanghai Composite traded flat, while Apple suppliers in across the region came under pressure.

Hong Kong’s Hang Seng ended the day down 0.3 percent.

Japan's Nikkei was closed for a holiday.

In Europe,  London’s FTSE traded down by 0.5 percent, Germany’s DAX fell 1.5 percent and France’s CAC lost 1.4 percent.

FOX Business' Mike Obel and Ken Martin contributed to this report.