Stocks are under renewed downward pressure amid worries that the Covid-19 virus will have a sizable negative impact on global growth after Apple (AAPL) warned that it won't make its previous sales forecast due to the lingering effects of the disease on both supply and demand.
ECONOMIC EVENTS: In the U.S., the Empire State manufacturing index surged 8.1 points to 12.9 in February, handily beating expectations. The NAHB housing market index fell 1 tick to 74 in February.
TOP NEWS: Shares of Apple are nearly 3% lower after the iPhone maker announced that it will not meet March quarter guidance due to disruptions to its supply chain and weaker than expected demand in China amid the Covid-19 outbreak. Several Wall Street analysts have argued that weakness in Apple shares as a result of the revenue shortfall will prove to be a buying opportunity, as this is seen as most likely a temporary situation that will leave future quarters largely unaffected. However, the news has also weighed down several of Apple's most prominent chip suppliers, including Qualcomm (QCOM), Broadcom (AVGO), Qorvo (QRVO), Skyworks (SWKS), Micron (MU), Western Digital (WDC) and Intel (INTC).
Walmart (WMT) reported worse than expected earnings and revenue for the holiday quarter, stating that sales leading up to Christmas in its U.S. stores were a little softer than expected. However, CEO Doug McMillon added that the new year has "started off well, and we look forward to another strong year." Near noon, Walmart shares were up almost 1%.
In M&A news, Franklin Resources (BEN) announced an agreement to acquire Legg Mason (LM) for $50.00 per share of common stock in an all-cash transaction. The company will also assume approximately $2B of Legg Mason's outstanding debt. Following the deal announcement, Legg Mason shares have jumped 24% to $50.37 while Franklin shares are also benefiting, rising 6%.
MAJOR MOVERS: Among the noteworthy gainers was Intelsat (I), which rose 28% after David Tepper's Appaloosa reported a 7.4% stake in the company and made public a letter to Intelsat's board to express its "dissatisfaction" with the recently announced proposed order issued by the FCC with respect to an auction of C-band spectrum currently licensed to the company and other satellite operators. Also higher was Vonage (VG), which gained 16% after reporting quarterly results.
Among the notable losers was Fluor (FLR), which slid 24% after announcing that the SEC is conducting an investigation of the company's past accounting and financial reporting. Also lower was Transocean (RIG), which fell 3.5% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 239.51, or 0.81%, to 29,158.57, the Nasdaq was down 39.38, or 0.40%, to 9,691.80, and the S&P 500 was down 19.09, or 0.56%, to 3,361.07.
Apple
-8.79 (-2.71%)
Walmart
+0.56 (+0.48%)
Intel
-1.13 (-1.68%)
Qorvo
-3.06 (-2.89%)
Skyworks
-2.49 (-2.09%)
Qualcomm
-1.53 (-1.71%)
Broadcom
-7.59 (-2.39%)
Micron
-1.12 (-1.91%)
Western Digital
-1.75 (-2.53%)
Franklin Resources
+1.495 (+6.14%)
Legg Mason
+9.61 (+23.60%)
Intelsat
+0.88 (+28.48%)
Bought by ERIC
+1.47 (+16.23%)
Fluor
-4.7 (-24.05%)
Transocean
-0.135 (-2.98%)