Wall Street slumps as Apple sinks to two-year low

By Tanya Agrawal

REUTERS - U.S. stocks were lower in early afternoon trading on Thursday, with the Nasdaq dropping more than 1 percent, after Apple fell to a two-year low and healthcare stock also tumbled.

Apple was the biggest drag on the three major indexes, falling as much as 3.3 percent to $89.47, its lowest since June 2014, as worries festered about slowing demand for iPhones.

Adding to the day's pressure, data showed that the number of Americans filing for unemployment benefits unexpectedly rose last week to the highest in more than a year, raising further concerns about the health of the labor market.

"This week there is a lack of big macro news, so the market is hunting around for something to latch on to," said John Canally, investment strategist and economist for LPL Financial in Boston.

"The weak jobless claims also dispelled some early euphoria. For the next few weeks I expect the market to be at the mercy of micro news and drift along."

A rally in the S&P 500 from its February lows petered out in the last two weeks due to underwhelming corporate reports and as economic data clouded the path of interest rate hikes this year.

On Thursday, two Fed officials said the central bank should raise rates if data points to an improving economy. Cleveland Fed President Loretta Mester said the Fed should recognize that there is uncertainty in its economic forecasting, but that should not "paralyze" monetary policy decisions.

Separately, Boston Fed President Eric Rosengren said the market is too pessimistic about the likelihood of hikes. Both are voting members on the Fed's rate-setting committee.

At 12:43 p.m. ET (1643 GMT) the Dow Jones industrial average was down 55.71 points, or 0.31 percent, at 17,655.41. The S&P 500 was down 9.03 points, or 0.44 percent, at 2,055.43. The Nasdaq Composite was down 47.70 points, or 1 percent, at 4,712.99.

Five of the 10 major S&P 500 sectors were lower, with the health index's 0.92 percent loss leading the decliners. Gilead and Biogen both fell more than 2 percent.

Monsanto rose 8.9 percent to $98.44 after the seed company was said to be a possible acquisition target, according to media reports.

Kohl's tumbled 12 percent to $34 after posting an unexpected drop in quarterly comparable sales.

GE fell 1 percent to $30, making it the second biggest drag on S&P. JPMorgan said GE's 2018 EPS goal of $2 would remain elusive, with its oil & gas segment the key headwind.

Declining issues outnumbered advancing ones on the NYSE by 1,774 to 1,124. On the Nasdaq, 1,963 issues fell and 726 advanced.

The S&P 500 index showed 19 new 52-week highs and 15 new lows, while the Nasdaq recorded 17 new highs and 83 new lows.

(Reporting by Tanya Agrawal; Editing by Savio D'Souza)