Apple cites coronavirus in revenue warning

Apple's warning that its revenue may be lower than expected due to the coronavirus outbreak in China was a factor in the Dow Jones Industrial Average falling Tuesday.

The anticipated disruption of the supply chain and reduced sales are key indications of possible impact of the outbreak on international businesses — even if the full effect isn't known.

Apple said this quarter's revenue will fall short of the targeted range of $64 billion to $67 billion because the coronavirus outbreak has limited iPhone production and eroded demand in China, where the company gets about 20 percent of its revenue.

"Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated," Apple said in a statement. "As a result, we do not expect to meet the revenue guidance we provided for the March quarter."

The DJIA fell 165.89 points, or 0.56 percent, and closed at 29,232.19, while the S&P 500 fell 9.87 points, or 0.29 percent, and closed at 3370.29. The Nasdaq Composite index closed up 1.57 points, or 0.02 percent, to 9732.74.

Shares of Apple fell $5.95, or 1.83 percent, and closed at $319 a share. The 52-week range is $169.49 to $327.85 a share.

Chipmakers, Broadcom, Intel, Qualcomm, Cirrus Logic and Qorvo — all Apple suppliers — also fell Tuesday.

But Credit Suisse said it expects the drop in semiconductor stocks to be temporary and it creates a buying opportunity.

"We would recommend that investors who can look into (the second half of 2020) and beyond should use weakness to accumulate best-in-class companies with a solid structural outlook," Credit Suisse analysts said in a research note.

Despite Tuesday's market dip, the major indices remain close to all-time highs, and the US economy remains strong. The S&P 500 posted about a dozen record closes this year.

On Friday, a survey by the University of Michigan showed Americans' view of the economy rose in February. The index of consumer sentiment was 100.9, beating the 99.5 of economists polled by Dow Jones.

"Current personal finances as well as evaluations of the national economy each posted large gains," Richard Curtin, chief economist for the Surveys of Consumers, said in a statement. "Net gains in household income and wealth were reported more frequently in early February than at any time prior since 1960."

Consumer spending represents about two-thirds of the US gross domestic product, the value of all goods and services produced in a year.

Meanwhile, HSBC Holdings, a British multinational investment bank and financial services company, said it plans to cut about 35,000 jobs and overhaul its businesses after its profit fell by about a third in 2019.

The bank said it plans to reduce its global workforce by about 15 percent to 200,000 over the next three years.

HSBC said it will sell about $100 billion in assets, reduce the size of its investment bank and close about one-third of its US branches as it refocuses on Asia and the Middle East, where it generates most of its profits. The restructuring is expected to cost $7.2 billion by 2022.