While you were sleeping: Apple downgrade triggers global tech selloff

Wall Street declined as shares of tech stocks including Apple fell amid concern about valuations, while oil gained.

Apple shares slid after Mizuho Securities downgraded its rating on the iPhone maker to "neutral" from "buy" and cut its price target to $US150 from $US160 per share, according to media reports.

"The stock has meaningfully outperformed on a year-to-date basis and we believe enthusiasm around the upcoming product cycle is fully captured at current levels, with limited upside to estimates from here on out," said analyst Abhey Lamba, according to Reuters.

At the close of trading in New York, the Dow Jones Industrial Average fell 36.30 points, or 0.17%, to 21,235.67. The Nasdaq Composite Index dropped 0.5% to 6175.46 and the Standard & Poor's 500 Index fell 0.1% to 2429.39.

"There's a chance US internet technology stocks that have propelled a global stock rally will now serve as a buzz kill," Mitsuo Shimizu, deputy general manager at Japan Asia Securities in Tokyo, told Bloomberg.

The Dow slid as declines in shares of Apple and those of McDonald's, down 2.5% and 1.7% respectively, outweighed advances in shares of General Electric and Chevron, up 3.6% and 1.2% respectively.

GE said John Flannery would succeed chief executive Jeff Immelt, who would be at the helm for 16 years on August 1. Separately, GE won approval from US antitrust officials to combine its oil and gas business with Baker Hughes to create the No 2 oilfield services company in the world, according to Bloomberg.

Crude prices gain
Shares of Chevron gained with the price of oil. Crude futures in New York rose 38USc to $US46.21 a barrel while Brent rose 30USc to $US48.45.

Saudi Arabia, the world's top oil exporter, will cut crude allocations to Asia in July to a total of about 300,000 barrels per day, deeper than in June, sources told Reuters.

One source said volumes to the US would be cut by about 35% in July, according to Reuters.

Some analysts remained cautious.

"You have to be careful not to be too optimistic for now," Petromatrix strategist Olivier Jakob told Reuters. "Physical differentials are still under pressure and the time structure is still under pressure in Brent. It's a bit premature to call for much higher oil prices."

The yield on the benchmark 10-year US Treasury note rose to 2.215% from 2.201% on Friday. 

Shares fall in Europe
In Europe, the Stoxx 600 Index finished down 1.0%. Tech shares shed 3.6% in the biggest retreat since June 2016, according to Bloomberg.

The UK's FTSE 100 Index fell 0.2%, Germany's DAX Index retreated 1.0% and France's CAC40 Index dropped 1.1%.

The British pound fell 0.7% to $US1.2658 after unease around UK elections sent the currency to its lowest level since April.

The US remains the place to be for some investors. Vanguard Group founder Jack Bogle told Bloomberg he's fully invested in US securities, with stocks and bonds having an equal share of his portfolio. And of course, it's all indexed.

"I believe the US is the best place to invest," Bogle told Bloomberg. "We probably have the most technology oriented economy in the world. I would bet that the US will do better than the rest of the world. It is a simple bet on which economy is going to be the strongest in the long run."

(BusinessDesk)