The Morning Journal (Lorain, OH)
Apple tops $1 trillion, leading gains for stocks
U.S. stocks climbed Thursday as Apple led a rally in technology companies and reached $1 trillion in value.
NEW YORK » U.S. stocks climbed Thursday as Apple led a rally in technology companies and reached $1 trillion in value. Consumer products and health care companies rose as second-quarter results from corporate America continued to surpass investors’ expectations.
Stocks in Asia and Europe fell after the White House said it will consider even higher tariffs on Chinese imports, escalating the trade conflict between the world’s two biggest economic powers.
U.S. stocks opened lower as energy and basic materials companies slumped, but those early losses eased as the day went on. Solid results from companies including Clorox, drugmaker Regeneron and electric car maker Tesla sent the market higher.
Apple jumped again, and became
the first publicly traded company to top $1 trillion in market value. The stock climbed 9 percent over Wednesday and Thursday, its biggest two-day move in more than four years, to hit the milestone.
GBH Insights analyst Daniel
Ives said Apple’s lofty price tag reflects its unique position as a technology company that sells popular products that work together and which people stick with.
“Once you buy one Apple device in a household, likely you’re going to buy multiple, three, four, five devices,” he said. “They’ve built a consumer product empire.”
Apple’s value rose almost $83 billion in the last two days. That’s as much as construction equipment maker and Dow component Caterpillar is worth. Other big technology companies also rose Thursday, recovering some of the losses they had absorbed late last week and early this week. Facebook and Microsoft both climbed.
The S&P 500 index rose 13.86 points, or 0.5 percent, to 2,827.22. The Dow Jones Industrial Average slipped 7.66 points to 25,326.16. The Nasdaq composite jumped 95.40 points, or 1.2 percent, to 7,802.69. The Russell 2000 index of smaller-company stocks added 12.84 points, or 0.8 percent, to 1,682.10.
Apple got to the $1 trillion mark shortly before noon and finished with a gain of 2.9 percent at $207.39.
Despite its eye-popping market value, by some measurements Apple stock isn’t very expensive. The stock trades at 17.8 times its expected earnings over the next year. That’s about the same as the rest of the S&P 500 index, and Apple has bigger profit margins.
Saudi Arabia’s state-owned oil company, known as Saudi Aramco, has taken steps to prepare for an initial public offering, and Saudi officials say the IPO will value the company at around $2 trillion. But it’s not clear when that offering might happen and without it, it’s difficult to value the company.
Tesla soared 16.2 percent to $349.54. The electric car maker said production of its lower-cost Model 3 sedan is growing and CEO Elon Musk said the company doesn’t expect to need to raise more money from investors.