Today's Paper Latest stories Obits Rex Nelson Wally Hall Brummett online Traffic Newsletters Weather Puzzles

NEW YORK -- Apple surged to its biggest gain in a year and a half on Wednesday and drew closer to $1 trillion in value after it reported stronger iPhone sales and rising prices. But losses for energy and industrial companies left major stock indexes lower.

Already the most valuable company in the U.S., Apple was the biggest gainer of any S&P 500 stock Wednesday and the technology giant finished at another record high.

That made up for a lot of losses elsewhere in the market. Investors sold industrial stocks after reports that President Donald Trump's administration is considering a higher tax rate on Chinese imports. Energy and materials companies fell with the price of oil, and metals and car companies also declined.

The S&P 500 index slid 2.93 points, or 0.1 percent, to 2,813.36. The Dow Jones industrial average lost 81.37 points, or 0.3 percent, to 25,333.82.

The Nasdaq composite added 35.50 points, or 0.5 percent, to 7,707.29, but the Russell 2000 index of smaller-company stocks lost 1.54 points, or 0.1 percent, to 1,669.26. Almost two-thirds of the stocks on the New York Stock Exchange traded lower.

The S&P 500 index rose 3.6 percent in July in spite of the trade war between the U.S. and China. The markets got a lift from strong company earnings as well as efforts by the U.S. and European Union to resolve their trade differences.

After the close of trading, the administration said it is studying putting a 25 percent tax on $200 billion in imports from China. It proposed a 10 percent tax in July, shortly after it placed a 25 percent tax on $34 billion worth of imports. China again threatened to retaliate.

China can't match the size of the tariffs the U.S. could put on Chinese exports. But Katie Nixon, chief investment officer for Northern Trust Wealth Management, said the Chinese government is already reacting to the new tariffs and the larger proposed ones by pumping more money into its economy and weakening its currency.

"They're sending a strong signal that they cannot just withstand [tariffs], but they can manage through a period of turmoil related to the negotiations," Nixon said.

As expected, the Federal Reserve left interest rates unchanged, but suggested it's likely to raise rates again in September. High-dividend stocks like consumer-products makers sank as bond yields increased. Automakers fell as they reported their monthly sales and Ferrari plunged after it said it might not make some of the profit goals laid out by Sergio Marchionne, its late CEO.

Apple said the average selling price for the iPhone jumped 20 percent in its latest quarter and its third-quarter profit and sales both surpassed analyst projections. Apple's third fiscal quarter is usually its weakest. The company's forecast for fourth-quarter revenue also topped Wall Street estimates.

Apple surged 5.9 percent to $201.50. That gives the company a value of $973 billion, based on its latest quarterly filing.

The Federal Reserve left interest rates unchanged and suggested it plans to keep raising rates as long as the economy stays healthy. The central bank noted the labor market continues to get stronger and the economy is growing at a strong clip, while inflation has reached its target of 2 percent a year.

Automakers mostly slid. Ferrari dropped 11 percent to $118 after new CEO Louis Camilleri warned that the company might not be able to reach the revenue targets outlined by Marchionne.

Bond prices sank. The yield on the 10-year Treasury note rose to 3 percent from 2.96 percent.

Business on 08/02/2018

Print Headline: Investors take a big bite of Apple

Sponsor Content


You must be signed in to post comments