Ap­ple takes shine off global stocks rally

Kuwait Times - - BUSINESS -

The S&P and the Dow opened lit­tle changed yes­ter­day, but the Nas­daq Com­pos­ite was pulled lower by a 1 per­cent fall in Ap­ple’s shares on con­cerns about the new iPhone X’s hefty price tag and de­layed ship­ping. A Nov 3 ship­ping date for the iPhone X, priced at $999, raised ques­tions about sup­ply con­straints ahead of the hol­i­day sea­son.

The three ma­jor Wall Street in­dexes hit record highs on Tues­day as the mar­ket closed higher for the sec­ond straight day. The in­dexes have been hit­ting record highs this year as they bounce back from pe­ri­odic set­backs caused by tur­moil in Wash­ing­ton, ques­tions over US in­ter­est rate hikes, doubts about the Trump ad­min­is­tra­tion’s abil­ity to push through its pro-busi­ness re­forms, and lately, ten­sions over North Korea.

“The slight weak­ness we’re see­ing this morn­ing is af­ter a two-day rally. The fun­da­men­tals and tech­ni­cals, how­ever, re­main strong,” said Peter Cardillo, chief mar­ket econ­o­mist at First Stan­dard Fi­nan­cial in New York. At 9:37 am ET (1337 GMT), the Dow Jones In­dus­trial Av­er­age was up 7.76 points, or 0.04 per­cent, at 22,126.62 and the S&P 500 was down 1.74 points, or 0.07 per­cent, at 2,494.74. The Nas­daq Com­pos­ite was down 13.77 points, or 0.21 per­cent, at 6,440.51. “There are con­cerns over the bull run, which is on sev­eral hope fac­tors. But the list of wor­ries is still there ... That would dampen the prospect of a stronger stock mar­ket,” Cardillo said. Six of the 11 ma­jor S&P sec­tors were lower, with fi­nan­cials lead­ing the de­clin­ers. The en­ergy in­dex was up 0.65 per­cent as oil prices rose af­ter the In­ter­na­tional En­ergy Agency said a global sur­plus of crude was start­ing to shrink. Ap­ple’s shares were down 1.08 per­cent at $159.17. Centene rose about 6 per­cent af­ter the health in­surer said it would buy pri­vately held Fidelis Care for $3.75 bil­lion.

Western Dig­i­tal fell more than 3.75 per­cent af­ter Toshiba agreed to fo­cus on sell­ing its chips unit to a group led by Bain Cap­i­tal and SK Hynix, but did not rule out a deal with other bid­ders.

Nord­strom gained 5.8 per­cent af­ter a source said the Nord­strom fam­ily has se­lected pri­vate eq­uity firm Leonard Green & Part­ners to help take the high-end re­tailer pri­vate.

De­clin­ing is­sues out­num­bered ad­vancers on the NYSE by 1,266 to 1,195. On the Nas­daq, 1,308 is­sues fell and 954 ad­vanced. The pan-Euro­pean STOXX 600 dipped 0.1 per­cent as weak­ness in chip­mak­ers was com­pounded by a drop in min­ers . Chip­mak­ers have been the best-per­form­ing among Europe’s tech stocks this year, ac­count­ing for a large chunk of the sec­tor’s out­per­for­mance. AMS shares have gained 165 per­cent year-to-date.

“The economics of the Ap­ple an­nounce­ment are in­ter­est­ing be­cause it will re­ally test this the­ory that in­fla­tion is go­ing to be weak,” said Mike Bell, global mar­kets strate­gist with JP Morgan As­set Man­age­ment in Lon­don.

“With the iPhone com­ing in around $1,000 it will be in­ter­est­ing to see how healthy de­mand is. If it’s rel­a­tively healthy I think it shows that there is still quite a lot of pric­ing power for US com­pa­nies and con­sumers have con­fi­dence.”

Mean­while, China stocks edged up yes­ter­day to hover near 20-month highs as ro­bust eco­nomic growth and hopes of fur­ther re­forms bol­ster in­vestors’ con­fi­dence, even as reg­u­la­tors tap the brakes on riskier types of credit. Both the blue-chip CSI300 in­dex and the Shang­hai Com­pos­ite In­dex ended up 0.1 per­cent, at 3,842.61 points and 3,384.15 points, re­spec­tively. Con­sumer and real es­tate firms led the gains, while banking stocks weak­ened. Af­ter lan­guish­ing for nearly two years, China’s stock mar­ket has come alive in re­cent months thanks to strong cor­po­rate profit and eco­nomic growth, rekin­dling the in­ter­est of in­vestors burnt by a mid-2015 crash. An in­dex track­ing in­vestor con­fi­dence rose to 58.6 points, the high­est level since Jan­uary 2016, as in­vestors were more op­ti­mistic about eco­nomic con­di­tions both at home and abroad, ac­cord­ing to the China Se­cu­ri­ties In­vestor Pro­tec­tion Fund.

China’s econ­omy has de­fied ex­pec­ta­tions for a slow­down this year, with early fears that a debt-crack­down will knock out­put eclipsed by a sus­tained con­struc­tion boom and resur­gence in global growth. Also sup­port­ing the mar­ket, mar­gin fi­nanc­ing-money in­vestors bor­row from bro­ker­ages to pur­chase stocks-has risen in the past two weeks to the high­est level this year, ac­cord­ing to UBS Se­cu­ri­ties, re­flect­ing im­prov­ing risk ap­petite.

UBS strate­gist Gao Ting said that although pol­i­cy­mak­ers re­mained fo­cused on re­duc­ing fi­nan­cial risks, “the re­cent strength of the RMB against the USD points to lower risk to do­mes­tic liq­uid­ity from cap­i­tal out­flow.” In­deed, the yuan’s surge this year has helped in­crease for­eign pur­chases of Chi­nese eq­ui­ties. Net pur­chases of main­land A-shares via the “Stock Con­nect” scheme in­creased for five months in a row to 27 bil­lion yuan ($4.14 bil­lion) in Au­gust, while for­eign hold­ings un­der the Qual­i­fied For­eign In­sti­tu­tional In­vestor (QFII) scheme jumped 18 per­cent in the sec­ond quar­ter.

Most Asian stock mar­kets were higher yes­ter­day af­ter US shares rose on en­cour­ag­ing jobs data while wor­ries about North Korea and twin hur­ri­cane dis­as­ters eased. Tokyo’s Nikkei 225 rose 0.5 per­cent to 19,879 points and In­dia’s Sen­sex was up 0.3 per­cent at 32,242.41. —Agen­cies

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