US open: Apple leads markets lower on China fears

(Sharecast News) - US stocks were trading lower on Thursday as investors continued to react to mixed economic data, while the Nasdaq was registering heavy losses owing to weakness in Apple's shares. The Dow was flat by 1007 ET, while the S&P 500 fell 0.7% and the Nasdaq dropped 1.5%.

Stock markets across Europe and Asia were in the red on Thursday after economic data dampened sentiment: Chinese imports and exports tumbling in August, albeit by less than expected, while German industrial output dropped 0.8%, worse than forecasts.

Furthermore, the Eurozone economy grew just 0.1% in the second quarter, a downward revision from an initial estimate of 0.3% growth, after growing by just 0.1% in the first quarter, in fresh signs that the single-currency bloc will slip into recession later this year. The number of employed people in the Eurozone increased by just 0.2% in the second quarter, after 0.5% growth in the first quarter.

US rate outlook in question

The S&P 500 reached a one-month high last Friday after the non-farm payrolls report raised hopes that the Federal Reserve would hold off from any further rate hikes at its next meeting. However, markets have pulled back over recent days on the back of heightened concerns over inflation following a surge in oil prices and ISM data showing a strengthening US services sector.

"Coming off the back of a surprise jump for the ISM services PMI survey yesterday, markets remain on the fence over what to expect from the Federal Reserve at the next meeting," said Joshua Mahony, analyst at Scope Markets.

Also clouding the picture was data on Thursday which showed unexpected strength in the labour market. Initial claims for jobless benefits in the US fell 13,000 last week to to 216,000, their lowest level since February, according to statistics from the Department of Labor. Analysts were expecting a 14,000 rise.

Meanwhile, a handful of Federal Reserve members were scheduled to speak on Thursday, including Philly Fed's Patrick Harker, New York Fed's John Williams and Fed governor Michelle Bowman.

Bond yields meanwhile continue to trade close to their recent highs, having peaked at a 15-year high last month. On Thursday, the 10-year Treasury yield was up 0.3 basis points at 4.287%, briefly touching 4.318%.

Apple slumps

Apple was down 5% on reports that China is banning government officials from using the iPhone at work. According to Bloomberg, the ban could extend to state-backed agencies and state-owned companies too.

"With the tech powerhouse having a huge Chinese presence, any move toward positioning their product as an external security risk will do little to help sentiment for sales in the region," said Scope Markets's Joshua Mahony.

Paper company WestRock was rising on the news that it is in merger talks with London-listed peer Smurfit Kappa, which would value the combined entity at $20bn.