Bellwether stocks signal gloom for the US

Apple's declining earnings spell trouble for the wider US economy.

"As goes tech, so goes the S&P 500." This US market maxim has cropped up regularly over the past few days as the major technology names have reported profits. The tech sector is the biggest contributor to the index's overall earnings, with heavyweight Apple the second-biggest stock. Before its slide last week, it was the S&P's (and the world's) top company by market capitalisation.

Apple has often given the sector's earnings a hefty fillip (see chart). This year, its shaky performance is expected to turn the industry's annual earnings growth negative in the first quarter (-4%). Without Apple, earnings would be marginally positive. S&P 500 earnings as a whole are set to decline slightly in the first quarter.

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