Wall Street Tumbles as Apple, Internet Stocks Swoon

U.S. stocks dropped and the Nasdaq fell 3 percent on Monday as investors dumped Apple, internet and other technology shares, further shaking confidence in a group of stocks that has propelled the long bull market. Conflicting signals over the state of play between the United States and China on their trade dispute added to caution in the market. Shares of Apple Inc fell after the Wall Street Journal reported the company had cut production orders in recent weeks for all three iPhone models launched in September. The iPhone maker's stock dropped 4.0 percent to $185.86 and is now down 19.9 percent from its Oct. 3 record closing high in the wake of a disappointing holiday quarter sales forecast and weak outlooks from several suppliers. The S&P 500 technology index, down 3.8 percent, led sector losses. Other market leaders - including the 'FANG' stocks - also fell sharply. Shares of Facebook were down 5.7 percent, Amazon.com was down 5.1 percent, Netflix fell 5.5 percent and Alphabet fell 3.8 percent. Since the FANG outperformance run peaked on Aug. 30, the group has underperformed the S&P 500 by 16.25 percent. That is their worst underperformance since the first half of 2014, when they underperformed by around 20 percent. “You’re seeing that rotation away from tech. Certainly the indexes are much more growth-oriented because of the sheer size of those companies now, and they dominate the indexes," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "You're going to have more underperformance of the growth names. “The S&P utilities and real estate sectors were the only two that ended in positive territory. The Dow Jones Industrial Average fell 395.78 points, or 1.56 percent, to 25,017.44, the S&P 500 lost 45.54 points, or 1.66 percent, to 2,690.73 and the Nasdaq Composite dropped 219.40 points, or 3.03 percent, to 7,028.48.Comments by New York Federal Reserve President John Williams on Monday that the U.S. central bank is pushing ahead with gradual rate-hike plans next month as it marches toward a more normal policy stance may have added pressure to stocks.