Drop in Apple shares due to weak iPhone X demand drags Wall Street lower

Wall Street's main indexes came under pressure on Tuesday following a 2.8 per cent drop in Apple's shares on a report of weak iPhone X demand.

Apple will slash its sales forecast for its flagship phone in the current quarter to 30 million units, down from what it said was an initial plan of 50 million units, Taiwan's Economic Daily reported, citing unidentified sources.

That, along with some bearish brokerage calls on iPhone X demand, put its shares on track for their worst single-day percentage fall since Aug. 10.

Shares of companies that supply parts to Apple, including Broadcom, Skyworks Solutions, Finisar and Lumentum Holdings, fell between 1.8 per cent and 3.5 per cent.

The S&P technology index fell 0.9 per cent, the only loser among the 11 major S&P 500 sectors.

Most markets around the world, including parts of Europe and Asia, were shut on Tuesday. Trading volumes are also expected to be light in the holiday week.

"It's going to be slow trading for most of the week. A market that's going to stay within a trading range, we could have a plus or a negative day, but nothing exciting," said Peter Cardillo, the chief market economist at First Standard Financial in New York.

At 9:34 a.m. ET (1434 GMT), the Dow Jones Industrial Average was down 8.32 points, or 0.03 per cent, at 24,745.74 and the S&P 500 was down 2.4 points, or 0.09 per cent, at 2,680.94.

The Nasdaq Composite was down 29.11 points, or 0.42 per cent, at 6,930.86.

Sucampo Pharma surged 6 per cent after Mallinckrodt said it would acquire the drugmaker for $1.2 billion, to gain access to its constipation drug Amitiza. Mallinckrodt shares rose 4.3 per cent.
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Wall Street flat as investors wait for hints on Fed rate hikes

US stock indexes were little changed on Tuesday as investors waited for more hints on interest rate hikes from Federal Reserve policymakers and the start of second-quarter earnings.

Federal Reserve chief Janet Yellen starts two days of testimony on Wednesday as it prepares to unwind the massive hoard of bonds it bought to ease the financial crisis.

"We've got Yellen's testimony tomorrow, there may be a little bit of nervousness ahead of that ... the semi-annual monetary policy testimony has often been a big deal for the markets," Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"I think there may be some fears that she's going to come out relatively hawkish."

The Federal Reserve Board Governor Lael Brainard will speak on monetary policy on Tuesday before a conference hosted by the Federal Reserve Bank of New York.

The Federal Reserve Bank of Minneapolis President Neel Kashkari will participate in a Town Hall question-and-answer session moderated by Bremer Bank CEO Jeanne Crain in Minneapolis, Minnesota.

Oil prices fell as BNP Paribas cut its forecasts for Brent by $9 to $51 a barrel for 2017 and by $15 to $48 for 2018. Barclays also cut its 2017 and 2018 Brent forecasts to $52 a barrel.

Crude prices are about 18 percent below their 2017 opening levels despite a deal led by the Organization of the Petroleum Exporting Countries to cut production from January.
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