Weak Chinese economic data weighed on global stocks Wednesday and the slowdown fears were poised to inflict even more damage after Apple slashed its revenue forecast due in part to sluggish demand in China that caught the tech giant off guard.
Apple, in an announcement after the US market closed, cited a surprising slowdown in China in the wake of the US-China trade war as a factor in trimming its revenue forecast.
"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China," Apple Chief Executive Tim Cook said in a letter to investors.
Cook, in an interview with CNBC, said the US-China trade "put additional pressure" on an already slowing Chinese economy, resulting in lower store and online traffic.
Apple shares tumbled 7.0 percent in after-hours trading.
The announcement came on the heels of anemic Chinese manufacturing data that pressured global stocks, although the US and some European bourses finished in positive territory due to a rally in oil-linked shares.
Hong Kong's main stocks index suffered bruising losses on the first trading day of 2019, tumbling 2.8 percent, while Shanghai shed more than one percent after two indicators showed Chinese manufacturing activity shrank in December.
The readings were both around lows not seen since 2017 and are the latest to highlight problems in the world's number two economy, as Beijing struggles with the US trade war while also trying to address a dangerously high debt mountain.
- Support from oil -
Asia's losses initially fed through into Europe and the United States but both London and Frankfurt closed the day with small gains.
After a weak open, Wall Street poked in and out of positive territory throughout the day before also ending with modest gains.
Support came from a Bloomberg News report of Saudi Arabian oil production cuts that lifted oil prices and petroleum-linked equities.
The euro and the dollar hit fresh multi-month lows against the Japanese yen, traditionally a "safe haven" currency that rises when investors are on edge.
US stocks are coming off of the worst year in a decade and the worst December for the S&P 500 since 1931, a distinction that has troubled President Donald Trump, who had previously touted a series of stock market records as evidence of his effectiveness.
Trump called the December pullback as a "glitch" during a Cabinet meeting on Wednesday, predicting the market would surge after a trade deal is reached with China. Talks with Beijing are "coming along very well," he said.
But IHS Markit said the stock market decline was a factor in cutting its forecast for US growth for 2019 through 2022. And IHS said in a note it could cut forecasts further if the US government shutdown drags on.
Among individual companies, shares of Tesla Motors dived 6.8 percent after the electric car maker delivered fewer vehicles than expected in the fourth quarter.
- Key figures around 2130 GMT -
New York - Dow: UP 0.1 percent at 23,346.24 (close)
New York - S&P 500: UP 0.1 percent at 2,510.03 (close)
New York - Nasdaq: UP 0.5 percent at 6,665.94 (close)
London - FTSE 100: UP 0.1 percent at 6,734.23 (close)
Frankfurt - DAX 30: UP 0.2 percent at 10,580.19 (close)
Paris - CAC 40: DOWN 0.9 percent at 4,689.39 (close)
EURO STOXX 50: DOWN 0.3 percent at 2,993.18 (close)
Hong Kong - Hang Seng: DOWN 2.8 percent at 25,130.35 (close)
Shanghai - Composite: DOWN 1.2 percent at 2,465.29 (close)
Tokyo - Nikkei 225: Closed for public holiday
Euro/yen: DOWN at 124.26 from 125.87 yen at 2200 on Monday
Dollar/yen: DOWN at 109.10 yen from 109.74 yen
Euro/dollar: DOWN at $1.1346 from $1.1465
Pound/dollar: DOWN at $1.2611 from $1.2740
Oil - Brent Crude: UP $1.11 at $54.91 per barrel
Oil - West Texas Intermediate: UP $1.13 at $46.54 per barrel