Stocks dip on Fed policy move
NEW YORK — Stocks ended Wednesday’s trading slightly lower as shares of energy companies and makers of consumer goods outweighed gains in technology companies such as Apple.
Investors also worked through the Federal Reserve’s latest policy statement. The Fed didn’t make any changes to interest rates but left the door open for increases later this year.
The Dow Jones industrial average fell 1.58 points, less than 0.1 percent, to 18,472.17. The Standard & Poor’s 500 index fell 2.60 points, or 0.1 percent, to 2,166.58. The technology-heavy Nasdaq composite rose 29.76 points, or 0.6 percent, to 5,139.81.
Apple shares jumped $6.36, or 6.6 percent, to $103.03. While the company reported lower revenue and iPhone sales, it still earned $10.5 billion last quarter, well above analysts’ estimates. Apple had been one of the biggest drags on the market this year as investors became concerned that its years of growth were ending. Apple nearly erased its loss for the year.
“The expectations for Apple were abysmal,” said Daniel Morgan, a portfolio manager at Synovus Trust Co. who owns Apple shares. “Everyone is waiting for later this year when Apple releases new products.”
Apple, one of the 30 stocks in the Dow Jones industrial average, is the first of the major technology companies to report this week.
Facebook shares jumped 8 percent to $131.05 in afterhours trading after the company’s quarterly results easily surpassed analysts’ expectations on both sales and profit. The company said roughly 1.71 billion people now use Facebook at least once a month, up 15 percent from a
year earlier.
Twitter, which reported its results late Tuesday, fell $2.68, or 15 percent, to $15.77. The social media company reported another loss and said user-adoption rates continue to slow. Roughly 313 million people regularly used Twitter last quarter, a fraction of the 1.7 billion people who use Facebook regularly.
“It’s really now becoming a question on whether Twitter as a concept is something financially viable,” Morgan said. “Fundamentally, is this going to work?”
The Federal Reserve voted to keep interest rates unchanged while noting that “near-term risks” to the economy have “diminished.” The Fed said the U.S. job market has rebounded, with strong job gains in June after weak growth in May. Investors will get another policy decision by one of the world’s central banks on Friday, when the Bank of Japan is likely to vote to increase its economic stimulus efforts.
Benchmark U.S. crude fell $1, or roughly 2.3 percent, to close at $41.92 a barrel on the New York Mercantile Exchange, continuing its month-long decline. Brent crude, used to price international oils, fell $1.40 to $43.47 a barrel in London.
Energy stocks were among the biggest decliners as oil prices fell. Marathon Oil, Transocean and Hess Corp. all fell roughly 4 percent or more.
Bond prices rose. The yield on the 10-year Treasury note fell to 1.51 percent from 1.56 percent, most of the gains coming after the Fed’s announcement. The dollar rose to 105.23 yen from 104.63 yen and the euro fell to $1.1054 from $1.0986.
In metals, the price of gold rose $5.90 to $1,326.70 an ounce, silver rose 31 cents to $20 an ounce, and copper fell 4 cents to $2.19 a pound.