Wall Street drops, weighed down by Apple and China worries

By Ankika Biswas and Noel Randewich

(Reuters) – Wall Street stocks tumbled on Monday as protests in major Chinese cities against strict COVID-19 policies sparked concerns about economic growth, while Apple Inc (NASDAQ:) slid on worries about a hit to iPhone production.

Shares of the Cupertino, California tech giant fell over 2% and weighed heavily on the benchmark as worker unrest at the world’s biggest iPhone factory in China fanned fears of a deeper hit to the already constrained production of higher-end phones.

Rare protests in major Chinese cities over the weekend against the country’s strict zero-COVID curbs are exacerbating worries about growth in the world’s second-largest economy.

“These protests are just evidence that this is a kind of a moving target where, will China continue to try to really constrain COVID’s spread?” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis.

“Or will they have more of a ‘living with COVID’ approach that we’ve seen in the United States and other countries?”

“We think COVID itself and China’s policy is one of the key variables for 2023 that would influence stock prices and investors,” Hainlin said.

S&P 500 stocks

All 11 S&P 500 sector indexes declined, led by real estate, down 2%, followed by a 1.91% loss in energy.

U.S. shares of Pinduoduo (NASDAQ:) Inc surged 14% after the Chinese e-commerce platform beat estimates for third-quarter revenue, helped by COVID-related lockdowns in the country that forced consumers to shop online. U.S. shares of other Chinese technology companies also rose, with Baidu (NASDAQ:) and Tencent Holdings (OTC:) each gaining over 2%.

In afternoon trading, the S&P 500 was down 1.20% at 3,977.86 points.

The declined 1.15% to 11,097.71 points, while the was down 1.15% at 33,953.73 points.

Shares of Amazon.com Inc (NASDAQ:) rose about 1% after an industry report estimated spending during Cyber Monday, the biggest U.S. online shopping day, would rise to as much as $11.6 billion.

Trading was mixed in other heavyweight growth stocks, including Microsoft Corp (NASDAQ:), Meta Platforms Inc, Nvidia (NASDAQ:) Corp and Tesla (NASDAQ:) Inc.

Biogen Inc (NASDAQ:) fell 3.5% following a report of death during a clinical study of its experimental Alzheimer’s drug.

Shares of cryptocurrency and blockchain-related companies Coinbase (NASDAQ:) Global Inc, Riot Blockchain (NASDAQ:) Inc and Marathon Digital Holdings Inc each fell more than 2% following lender BlockFi’s bankruptcy filing, the latest casualty since FTX’s collapse earlier this month.

This week, investors will keep a close watch on November consumer confidence data, due on Tuesday; the government’s second estimate for third-quarter gross domestic product, due on Wednesday; and November nonfarm payrolls due on Friday.

Declining stocks outnumbered rising ones within the S&P 500 by a 7.7-to-one ratio.

The S&P 500 posted 11 new highs and two new lows; the Nasdaq recorded 75 new highs and 120 new lows.

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