US markets tumble as Apple earnings disappoint

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NEW YORK (AFP) – Apple shares plunged Wednesday after reporting its first ever drop in iPhone sales, with the world s largest company by market value dragging Wall Street into the red in early trade.

Apple shares sank 7.2 percent after its fiscal second quarter earnings report released late Tuesday showed a fall in profits and the first drop in quarterly revenues since 2003.

The weak Apple results were most detrimental to the tech-rich Nasdaq Composite Index, which was down 0.8 percent to 4,851.06 about 35 minutes into trade.

The Dow Jones Industrial Average lost 0.1 percent at 17,975.05, while the broad-based S&P 500 also fell 0.1 percent at 2,090.19.

The losses came ahead of the Federal Reserve monetary policy update slated for 1800 GMT. While analysts expect the US central bank to keep interest rates unchanged, the statement will be scrutinized for signals about potential rate hikes in June or later in 2016.

Boeing dipped 0.1 percent after reporting an 8.8 percent drop in first-quarter earnings to $1.2 billion on lower commercial deliveries and a $156 million charge to cover unexpected costs in the KC-46 military aircraft program.

Twitter shares dived 16.4 percent as growth in regular users appeared to stall, according to its first quarter earnings report, triggering more worries that the microblogging service is losing steam with its audience.

Other companies to report earnings included: Boston Scientific, up 10.2 percent; eBay, up 6.2 percent; Chipotle Mexican Grill, down 4.7 percent; Mondelez International, up 3.7 percent; United Technologies, up 0.9 percent;

Yahoo dipped 0.8 percent as it reached a compromise with activist hedge fund Starboard Value, agreeing to add four new members to its board. Starboard had launched a bid to replace the entire board of Yahoo, which is in talks with potential bidders for the company.

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