The world's largest company suffered its worst three-day stretch since early 2013 in the last half of the week after disappointing earnings kicked off a wave of selling. Apple reported its first revenue decline in 13 years on Wednesday, prompting billionaire investor Carl Icahn to disclose he no longer had any stake in the company.
The stock tumbled 11% for the week, trading near its 52-week low on Friday.
"While we continue to view Apple through a long-term lens; we acknowledge that the undercurrents of event-driven trading are likely to prevail in the interim," Jim Cramer and Jack Mohr of the Action Alerts PLUS portfolio wrote in a note to investors. The portfolio holds Apple as well as tech stocks like Facebook and Twitter.
Apple's selloff pulled fellow tech names lower and spurred broader declines through Friday's close. For the week, the S&P 500 fell 1.25%, the Dow Jones Industrial Average dropped 1.27%, and the Nasdaq fell 2.7%.
Benchmark indexes were also lower for the month. The S&P 500 fell 0.3%, the Dow dropped 0.5%, and the Nasdaq slid 1.9%.
"Twitter's track record of disappointment leaves little room for error and zero room for forgiveness," Cramer and Mohr said. "The fact that management seems incapable of even meeting the lower end of prior forecasts suggests they are out of touch with demand for their own product."
Groupon (GRPN - Get Report) quadrupled quarterly losses on increased promotional expenditures. An adjusted loss of one cent a share compared to profit of 3 cents in the year-ago quarter. Xerox (XRX - Get Report) sold off after restructuring costs related to its planned split reduced earnings from a year earlier.
Quarterly performance expectations had been low for many tech firms, which grappled with a stronger U.S. dollar and weaker global demand. The sector is expected to report a 6% decrease in average earnings for the period, according to S&P Capital. Overall, S&P 500 companies may post a 6.6% drop, marking the fourth straight quarter of declines and the worst losing streak since the Great Recession.
There have been some tech standouts, though. Amazon (AMZN - Get Report) breezed past earnings estimates after returning to a profit in its first quarter, and Facebook (FB - Get Report) impressed investors with revenue growth of 52%.
"The results, simply, speak for themselves," Cramer and Mohr said. "We fully embrace Facebook's continued outperformance. The ability of this management team to execute on its lofty goals is unmatched, and its investments are clearly paying off."
EXCLUSIVE LOOK INSIDE: Want to be alerted before Jim Cramer buys or sells Apple, Facebook or Twitter? Learn more now.
It was a big week for deals, chief among them DreamWorks Animation's (DWA) purchase by Comcast's (CMCSA - Get Report) Universal Pictures for $3.8 billion. In other media deals, Rovi (ROVI) reached an agreement to acquire TiVo (TIVO - Get Report) for around $1.1 billion, while Gannett (GNI) offered to buy Tribune Publishing (TPUB) in a deal worth $815 million.
In health care, Medivation (MDVN) rejected a $9.3 billion offer from Sanofi (SNY - Get Report) , arguing the proposal undervalues the company. Separately, Abbott Laboratories (ABT - Get Report) agreed to buy St. Jude Medical (STJ) for $25 billion.
The Federal Reserve's two-day meeting ended on Wednesday with a nearly unanimous decision to keep benchmark rates at 0.25% to 0.5%. In a statement, monetary policy committee members said that economic growth appears to have slowed.
The committee "took a cautious interpretation of domestic and external developments at its April meeting," Barclays analysts wrote in a note. "We retain our baseline outlook for two rate hikes for the remainder of the year, but the timing will be highly dependent on the evolution of domestic activity and external risks. While our forecast continues to call for a rate hike in June, the hurdle is high and the second hike could slip to July or September."
The first estimate of quarterly GDP growth confirmed fears of a slowdown. The economy expanded at a rate of 0.5% in the three months through March after a respectable 1.4% rise in the fourth quarter.
Economists had expected growth would dip only to 0.7%, and most remain optimistic that the slowdown is temporary and there will be a rebound in the remainder of 2016.
"Some of the headwinds the economy faced in late 2015/early 2016 are diminishing (i.e., financial conditions are becoming more accommodative), setting the stage for a reacceleration in economic activity," Kevin Cummins, U.S. economist at UBS, wrote in a note. "In our view, the domestic economy remains on solid footing, perhaps reflecting the lagged benefit of still-low energy prices."