The Dow Jones Industrial Average fell for a third consecutive day on Tuesday as investors weighed a stark warning from tech giant Apple.
The 30-stock average closed down 165.89 points, or 0.6%, at 29,232.19. The S&P 500 dipped 0.3% to end the day at 3,370.29. The Nasdaq Composite, however, eked out a small gain to post a record closing high at 9,732.74.
Netflix rose 1.9% and reached a its highest level since July 2018 while Alphabet gained 0.1%. Tesla contributed to the Nasdaq's gains as well, rising more than 7%.
Apple cautioned it does not expect to meet its quarterly revenue forecast, citing slowed production and weakened demand in China as a result of the coronavirus outbreak. The most valuable company in the U.S. initially said it expected to report net sales between $63 billion to $67 billion in its fiscal second quarter. Apple also finished the session well off its lows of the day, closing 1.8% lower.
"While this is disappointing, by now we don't believe it's surprising, and we still expect the issues to be transitory," said Chris Caso, an analyst at Raymond James, in a note. "We think almost all of the production and most of the demand is likely to be recaptured once Apple's manufacturing partners are able to return to full production, and once retail facilities in China return to normal."
The company has not provided an updated forecast for its fiscal second-quarter.
"In the short-term myopia of market consensus thinking, this downward cycle of first-quarter 2020 EPS estimates will be a short-term headwind," said Tom Lee, founder and head of research at Fundstrat Global Advisors. "Expect a lot of negative chatter in the next few weeks."
Apple's warning sent shares of some suppliers lower. Skyworks Solutions slid 1.9% while Xilinx and Qorvo dropped 1% and 2.6%, respectively.
China's National Health Commission on Tuesday reported an additional 98 deaths nationwide, with 1,886 new cases of the coronavirus. As of Feb. 17, the commission said there had been a total of 72,346 confirmed cases and 1,868 deaths.
Investors on Tuesday sold stocks in favor of traditionally safer assets such as Treasurys and gold. The benchmark 10-year U.S. Treasury yield fell to around 1.55% (yields move inversely to prices). Gold futures for April delivery climbed more than 1% to settle at $1,603.60 per ounce, its highest settlement level since 2013.
"Today's dosage of economic reality is coming as a wake-up call to global investors who continue to buy into the belief that Chinese authorities have the coronavirus under control," said Erik Bregar, head of FX strategy at the Exchange Bank of Canada, in a note.
—CNBC's Sam Meredith contributed to this report.
Correction: This story has been updated to reflect Netflix hit its highest level since July 2018, not an all-time high.