European Stocks Slump, Tech Sector Drifts After Apple's iPhone Miss Hits Suppliers

Frankfurt (May 3)  European stocks drifted lower Wednesday as investors stepped back from a global market rally after disappointing earnings from Apple Inc. (AAPL) and weaker U.S. car sales put investors in a cautious mood ahead of today's meeting of the U.S. Federal Reserve.

The region-wide Stoxx Europe 600 benchmark slipped by around 0.1% in the opening hour of trading, with tech and industrial sector shares leading the declines. Germany's DAX performance index was marked 0.11% lower, with shares in Volkswagen AG  (VLKAY) one of the session's biggest decliners despite its better-than-expected first quarter profit tally and VW sales surge.

Currency markets have also been active in both the Asia and European session, with both the euro and the pound holding onto gains against the greenback even as the U.S. dollar index found favour in overnight Asia trade ahead of today's Fed meeting, with investors betting that chairwoman Janet Yellen will provide more specific signals for a June rate hike.

However, with the pound trading at  a near six-month high of 1.2922, and oil prices still on the back foot despite an overnight rebound, Britain's FTSE 100 was marked 0.3% lower at 7,228 points by 09:15 BST.

Tech sector shares were also under pressure following Apple (AAPL) 's surprise fall in second quarter iPhone sales, which rippled through stock markets around the world amid concerns for demand of its flagship product.

Shares in Dialog Semiconductor (DLGNF) , a key Apple supplier, were marked 1.8% lower at €42.05 each in Frankfurt, after slumping as much as 3.3% in the opening minutes of Frankfurt trading, extending its three-month decline to more than 5%. Dialog is a long-time supplier of power management ICs (PMICs) used in iOS devices. Dialog gets close to three-quarters of its sales from Apple.

Source:TheStreet