Stocks slide on Apple's forecast, dollar rebounds
By Herbert Lash
NEW YORK (Reuters) - Global equity markets fell on Wednesday, pulled down by a weak revenue forecast at Apple Inc, the world's largest company, while a rebounding dollar after its biggest decline in a month weighed on gold and some stocks.
Apple (AAPL.O: Quote) shares slid 4.3 percent after the company's fourth-quarter revenue forecast fell short of estimates and it missed some targets for iPhone sales.
The poorly received earnings report hit companies with close ties to Apple. In Europe, chip designer ARM Holdings ARM.L, a major supplier, tumbled 6.6 percent and German chipmaker Dialog Semiconductor (DLGS.DE: Quote) fell 5.2 percent.
Because of Apple's size, its decline was disproportionately felt on the market, said Phil Orlando, chief equity market strategist at Federated Investors in New York.
"You are seeing a hit as a knee-jerk reaction on the downside," Orlando said. "The company is still growing like a weed. It's well managed and well capitalized."European tech stocks shed nearly $6 billion of market value, with the STOXX Europe 600 tech index off 1.7 percent.
Art Hogan, chief market strategist at Wunderlich Securities in New York, said there is concern regarding the lack of organic revenue growth and the strong dollar, which will continue to be a drag, but that effect should moderate over time.
U.S. companies are expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar, which cuts the value of overseas income.
The FTSEurofirst 300 index .FTEU of leading European shares closed down 0.62 percent at 1,586.46, while MSCI's all-country world stock index .MIWD00000PUS was down 0.65 percent. Continued...