(For a live blog on the U.S. stock market, click LIVE/ ortype LIVE/ in an Eikon news window.)
* Apple tumbles on sales forecast cut, blames China
* Futures slide: Dow 1.39 pct, S&P 1.36 pct, Nasdaq 2.10 pct
* Trade-sensitive Boeing and Caterpillar also fall
* Celgene soars on Bristol-Myers' $74 bln deal (Adds comments, updates prices)
By Sruthi Shankar
Jan 3 (Reuters) - U.S. stock index futures tumbled onThursday after Apple IncAAPL.O stunned investors with a raresales warning that inflamed fears that the Sino-U.S. trade warand a slowing China economy would eat into corporate profitsmore than expected.
Apple's shares sank 8.2 percent before the bell after thecompany slashed its holiday-quarter revenue forecast due toslowing iPhone sales in China, the first major warning with theU.S. earnings season around the corner. urn:newsml:reuters.com:*:nL3N1Z236Y
"This provides solid evidence of how slowing economic growthand a trade war make the best death cocktail for sentiment,"said Naeem Aslam, chief market analyst at Think Markets UK Ltdin London.
The warning from Apple, whose stock is a member of all thethree major Wall Street indexes, rocked financial markets, asinvestors sought safety in bonds and less risky assets.
At 7:49 a.m. ET, Dow e-minis 1YMc1 were down 324 points,or 1.39 percent. S&P 500 e-minis ESc1 were down 34.25 points,or 1.36 percent and Nasdaq 100 e-minis NQc1 were down 134points, or 2.1 percent.
Apple's slide is a gloomy omen for Wall Street bulls hopingfor an early gift in 2019 following December's steep selloff,which President Donald Trump has called a "glitch". urn:newsml:reuters.com:*:nL1N1Z21N0
Though the selloff has made stocks cheaper, with the S&P500's valuation now at 14 times expected earnings from 18 timesa year earlier, earnings estimates have also been sharply cut.
Analysts on average expect S&P 500 companies to increasetheir earnings per share by nearly 7 percent this year, downfrom a forecast of 10 percent at the start of October and farbelow their expectations of 24 percent EPS growth for 2018,according to Refinitiv's IBES.
Apple's warning on China has the potential to weigh heavilyon a wide variety of companies, ranging from its suppliers tocompanies that rely on China for a major portion of their sales.
Chipmakers, which count both Apple and China as majorcustomers, led the decliners in early premarket trading, withIntel Corp INTC.O , Micron Technology IncMU.O and NvidiaCorp NVDA falling between 2.3 percent and 4.6 percent.
Trade bellwethers Boeing CoBA.N and Caterpillar IncCAT.N dropped over 2 percent.
The United States and China are about one month into a90-day tariff ceasefire to negotiate a deal. President DonaldTrump said on Wednesday the talks were going "very well" andthat the stock market would rise once various trade deals aresettled. urn:newsml:reuters.com:*:nL1N1Z20XC
Apple's warning follows data earlier this week that showed adeceleration in factory activity in China and the euro zone,indicating the ongoing trade dispute was taking a toll on globalmanufacturing.
The impact on U.S. activity will be clear later on Thursday.At 10 a.m. ET, the Institute of Supply Management is expected toreport its index of national factory activity fell to a readingof 57.9 in December from 59.3 in November.
Before that, at 8:15 a.m. ET, the ADP National EmploymentReport is expected to show private payrolls rose by 178,000 jobsin December. The report comes ahead of the more comprehensivenonfarm payrolls report on Friday.
Among stocks, Celgene CorpCELG.O jumped 31.9 percentafter Bristol-Myers Squibb CoBMY.N offered to buy thedrugmaker for about $74 billion in a cash-and-stock deal.Bristol-Myers fell 13.6 percent. urn:newsml:reuters.com:*:nL3N1Z32RL (Reporting by Sruthi Shankar & Shreyashi Sanyal in Bengaluru;Editing by Shounak Dasgupta) ((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 2238780; outside U.S. +91 80 6749 6328; Reuters Messaging:sruthi.shankar.reuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
