Dow Falls 660 Points as Apple Stokes Global-Economy Worries

The new iPhone models that aren't being taken up

"We don't view the Apple pre-announcement as a canary in the coal mine for emerging markets at large", says Bhansali.

A NY law firm is garnering support for a shareholder lawsuit against Apple.

"The gut reaction here feels oversold", said Mike Bailey, the director of research at FBB Capital Partners, which owns shares of Apple.

"We believe the economic environment in China has been further impacted by rising trade tensions with the United States".

Analysts see iPhone's high price point and lack of major updates as the major reasons for the Chinese market's lukewarm reaction to its new iPhone releases.

Apple's stock price hovered around the $143-$144 mark in the first few minutes of trading, down about 9% from Wednesday's closing price of $157.92.

"(That's) nearly three times as expensive as phones from other vendors that are filling the mass market". Apple's market share has dropped to 7.5% in the third quarter from 11.2% in the first quarter, while Huawei has been in the lead with an average market share of 25.5%, according to IDC.

The revenue cut for the just-ended quarter raises questions about whether Apple, the face of American business in many parts of the world, is being punished by Chinese officials or consumers in favor of local rivals such as Huawei Technology Cos Ltd, whose pricey smart phones compete with the iPhone.

In a press release published while trading in its shares was halted, Apple said it expects revenue of about $84 billion in the quarter ended December 29. Nowadays though, the iPhone is more expensive than ever and less people seem interested in upgrading, leading to Apple issuing its first "profit warning" since 2002. Thursday's plunge also pushed Apple market valuation to less than $700 billion and down to fourth place among most valuable publicly traded U.S. companies, just two months after it took the top spot.

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In the USA government bond market, a typical safe-haven, the yield on the benchmark 10-year, which moves inversely to the bond's price, sank to an 11-month low.

Shares of Apple closed at US$148.26 apiece on Friday, down about 5.1% this week.

"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.

China has become a popular boogeyman-for the markets and now, for Apple.

Analysts are adding Apple's predictions and their effects to fears of an economic slowdown. Automakers such as Ford Motor Co, Hyundai Motor Co and Nissan Motor Co Ltd all previously said they planned to cut production in the country.

China's "economy began to slow there for the second half", Cook said during an interview with CNBC on Wednesday afternoon. The truth remains that the iPhone has always been Apple's core business and if Apple can't sell enough of them, the whole company struggles. In November, Apple unexpectedly announced that it would no longer disclose how many iPhones it ships each quarter, ending a long-running practice. That growth came entirely from higher prices. "It is true that China has had a broad slowdown but the Apple weakness is more to due to company specific factors".

But some investors were heartened by Apple's plans on using its cash pile.

The Fed's interest-rate and bond portfolio policies "were at the top of the list of things we were concerned about, which is why the statement Powell made today is so supportive of the market", Orlando said.

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