Shares of technology companies fell sharply as traders retreated from a sector perceived as risky.
Apple shares fell by almost 5% after analysts at brokerage Bank of America Global Research cut their ratings on the iPad and iPhone maker, citing the diminished outlook for consumer spending. Pessimism about Apple's earnings was already mounting after a Bloomberg report earlier in the week that it had reversed plans to increase production of the iPhone 14.
"It's hard to believe, in an inflationary environment, with costs going higher, that it wouldn't affect demand for items that cost $800, $900," said JJ Kinahan, chief executive of IG North America, the parent company of options firm tastytrade.
A pandemic-era trade where investors bought any dips in Apple and Microsoft because of their reputation for rapidly bouncing back is now a thing of the past, said Mr. Kinahan.
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(END) Dow Jones Newswires