The Morning Journal (Lorain, OH)
Stocks edge lower despite Apple’s big gain
Stocks ended trading slightly lower as shares of energy companies outweighed gains in technology companies.
NEW YORK >> Stocks ended Wednesday’s trading slightly lower as shares of energy companies and consumer goods makers outweighed gains in technology companies like 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 lost 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 jumped $6.36, or 6.6 percent, to $103.03. While the company reported lower revenue and iPhone sales, it still earned $7.8 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 massive growth were coming to an end. Apple nearly erased its loss for the year.
“The expectations for Apple were abysmal,” said Daniel Morgan, a portfolio manager at Synovus Trust Company 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. Investors got results from Facebook after the close of trading Wednesday, which will be followed by Amazon and Google later this week.
Facebook shares jumped 8 percent to $131.05 in aftermarket 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.
Coca-Cola, another component of the Dow, fell $1.48, or 3.3 percent, to $43.40 after the beverage giant trimmed its sales outlook for the year, citing weak demand in China and other international markets. Coke has faced headwinds in the U.S. and internationally as more consumers move away from sugary drinks.
Twitter, which also reported its results late Tuesday, plunged $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 following weak growth in May.