Dow Industrials Rise Despite Drag From Apple
October 26 2016 - 3:03PM
Dow Jones News
By Akane Otani and Mike Bird
Gains in Boeing's shares helped offset Apple's losses in the Dow
Jones Industrial Average during choppy trading Wednesday.
Corporate earnings have driven some of the largest moves in
stocks over the past week. More than a third of S&P 500
companies have reported quarterly results, according to FactSet,
with energy, industrial and technology companies posting the
weakest earnings growth so far.
Apple, which posted its first annual revenue decline in 15 years
on Tuesday, was the biggest loser in the Dow industrials on
Wednesday, falling 2.6%. The company is the biggest drag on the
S&P 500 tech sector's third-quarter earnings growth from a year
earlier, according to FactSet analyst John Butters.
The Dow industrials got a lift from Boeing, which rose 5% after
the aircraft maker raised its full-year guidance. The blue-chip
index recovered from earlier losses to rise 45 points, or 0.3%.
"Earnings growth is going to be really, really key for continued
growth in the market, even though we've muddled along without that
for a while, " said Karyn Cavanaugh, senior market strategist at
Voya Investment Management.
The Nasdaq Composite fell 0.6% and the S&P 500 edged down
0.1%.
Shares of Chipotle Mexican Grill fell 9.1% after it reported
steep drops in sales and profit, showing that the burrito chain is
still recovering from last year's E. coli outbreak that scared
customers away.
Despite announcing earnings above expectations, shares of
Southwest Airlines fell 8.6% as investors appeared to focus more on
the air carrier's negative outlook.
Among the day's top performers were cloud-services firm Akamai
Technologies, up 15%, and Juniper Networks, up 10%. Investors
rewarded both companies after they reported upbeat earnings after
the market closed Tuesday.
U.S. crude pared losses after an Energy Information
Administration report showed storage levels fell by 553,000 barrels
last week. The latest inventory data came as a surprise as analysts
had been expecting around a two million barrel increase. Oil prices
declined 1.6% to $49.18 a barrel.
Bond yields in developed markets pushed higher. The yield on the
10-year Treasury note was at 1.79%, according to Tradeweb, compared
with 1.758% Tuesday. German 10-year yields rose to 0.09%, from
around 0.02% on Tuesday.
Elsewhere around the globe, stocks mostly fell.
The Stoxx Europe 600 index pulled back 0.4% and the U.K.'s FTSE
100 index dropped 0.8%. The British pound bounced back against the
dollar, rising 0.4% to $1.2231 after falling Tuesday.
"With the terms and conditions of the U.K.'s future trade links
still unclear it is too early to rule out further downside risks in
sterling," said Geoffrey Yu, head of UBS Wealth Management's U.K.
investment office. Mr. Yu said he believes sterling could fall to
as low as $1.10 temporarily over the next year.
Asian stocks closed broadly lower, with Hong Kong's Hang Seng
down 1%. Japanese equities bucked the trend, with the Nikkei Stock
Average closing up 0.2%.
Write to Akane Otani at akane.otani@wsj.com and Mike Bird at
Mike.Bird@wsj.com
(END) Dow Jones Newswires
October 26, 2016 15:48 ET (19:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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