Apple surges on iPhone sales as stock indexes wobble

Apple surges on iPhone sales as stock indexes wobble

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Apple CEO Tim Cook

Investors reacted quietly on today to a strong hiring survey and the Federal Reserve’s decision to leave interest rates unchanged.

US stocks finished little changed, but Apple soared after it said iPhone sales improved in its latest quarter.

Stocks jumped in morning trading after payroll provider ADP said hiring by private employers grew stronger in January.

Bond prices climbed but the market’s gains thinned, partly because investors sold shares of companies that pay big dividends as bond yields rose.

Stocks briefly turned higher after the Fed’s announcement, but that also faded. The only constant was the big gain for Apple, which pushed technology companies higher.

The Federal Reserve left its key interest rate unchanged, just as investors expected.
The central bank noted that the job market is getting stronger and inflation is gradually rising, but said it wants more time to monitor the economy.

The Dow Jones industrial average rose 26.85 points, or 0.1%, to 19,890.94. The Standard & Poor’s 500 inched up 0.68 points to 2,279.55. The Nasdaq composite, which has a high concentration of technology companies, gained 27.86 points, or 0.5%, to 5,642.65. The Russell 2000 index of smaller company stocks dipped 0.60 points to 1,361.23.

Most stocks listed on the New York Stock Exchange fell.

Apple made its biggest one-day jump six months after its first-quarter profit and sales were better than analysts expected.

The company said consumers snapped up its new iPhone 7 and 7 Plus, and that ended the first slump in iPhone sales.

Apple stock rose 7.44 dollars, or 6.1%, to 128.79 dollars.

Apple was singlehandedly responsible for the Dow gain and it helped take technology stocks higher.

Chipmaker Advanced Micro Devices reported a profit when analysts expected a loss, and its sales were greater than expected. Its stock climbed 1.69 dollars, or 16.3%, to 12.06 dollars.

The ADP jobs survey was better than expected, and the construction, manufacturing, health care and shipping industries all added jobs at a solid pace. The US government will release its own monthly jobs report on Friday.

Investors reacted to the hiring report by selling bonds, which are relatively safe investments that are in greater demand when the economy seems weaker.

The yield on the 10-year Treasury note rose to 2.48% from 2.44%.

Stocks that pay large dividends traded lower as bond yields rose. Dominion Resources dropped 4.43 dollars, or 5.8%, to 71.85 dollars. Dominion also released a weak quarterly report.

The S&P 500’s energy company index fell for the fifth day in a row. It is down almost 3.5% over that time and has sunk 7% since December 13.

Lightweight aluminium products maker Arconic surged after its largest shareholder said the company needs new leadership.

Elliott Management nominated five potential directors to Arconic’s board. The company said it stands by chief executive Klaus Kleinfeld and that Elliott’s moves are not in the best interest of all shareholders.

Since Arconic split from Alcoa on November 1, Arconic stock was almost flat and Alcoa has jumped almost 70%. Arconic gained 2.55 dollars, or 11.2%, to 25.28 dollars.

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