DAL Delta Air Lines Inc

   By Patrick Thomas 
 

Stocks slumped Thursday as two large U.S. companies cut their revenue forecasts, prompting fears from investors that more companies are seeing signs of a global economic slowdown.

Apple Inc. (AAPL) lowered its quarterly revenue forecast for the first time in more than 15 years as it deals with shrinking demand in China and fewer owners upgrading their smartphones.

Shares in Apple closed down nearly 10%, the biggest decliner on the Dow Jones Industrial Average on Thursday.

Delta Air Lines Inc. (DAL) reduced its unit revenue forecast for the quarter after earning less than it anticipated from its highest-priced fares in late December. Delta closed down nearly 9%.

Kevin Hassett, chairman of the White House Council of Economic Advisers, also warned Thursday that other U.S. companies could join Apple in seeing weaker sales. The White House expected the economy to grow 3% this year, Mr. Hassett said in an interview with The Wall Street Journal. Fed officials projected 2.3% growth when they met two weeks ago.

"There are signs that the Chinese economy is slowing sharply," Mr. Hassett said. "Multinational firms with profits in China are probably going to see at least that part of their profit picture sour a little bit."

Analysts have largely expected U.S. companies to see slower earnings growth this year. Greg Boutle, U.S. head of equity and derivative strategy for BNP Paribas, is expecting earnings growth for S&P 500 companies to slow to 5% after more than 20% in 2018.

The news from Apple and Delta, along with soft guidance form FedEx Corp. (FDX) and Micron Technology Inc. (MU) at the end of last year, has fed into negative market expectations, Mr. Boutle said.

"When we start to see a trend of more bearish forward-looking guidance, that is something we would expect investors to start to extrapolate for the broader market," Mr. Boutle said.

Neil Goddin, manager of the Kames Global Equity fund of Kames Capital, said further warnings across multiple sectors, especially from luxury goods and industrials, will likely mean stock prices will continue to fall.

Mr. Goddin warns markets could go "a lot lower if we truly are entering a meaningful slowdown."

--Lorena Ruibal contributed to this article.

Write to Patrick Thomas at patrick.thomas@wsj.com

(END) Dow Jones Newswires

January 03, 2019 16:46 ET (21:46 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.