Stock indexes fall on weak forecasts from Apple and Boeing
Stocks claw higher after an early drop, helped by oil price
(about 1 hour later)
NEW YORK — U.S. stocks are down Wednesday morning as a shaky forecast from Apple takes tech stocks lower. Disappointing outlooks from aircraft makers Boeing and Textron hit industrial stocks. The Federal Reserve is holding its first meeting of the year and investors are waiting to see what it says about interest rates and the economy. Energy stocks took another tumble.
NEW YORK — Stocks are clawing back the ground they lost in a morning slump after the price of crude oil turned higher.
KEEPING SCORE: The Dow Jones industrial average sank 135 points, or 0.8 percent, to 16,034 as of 10:55 a.m. Eastern time. Dow components Apple and Boeing took large losses. The Standard & Poor’s 500 index gave up 10 points, or 0.5 percent, to 1,893. The Nasdaq composite index, which has a high concentration of tech stocks, fell 50 points, or 1.1 percent, to 4,517.
U.S. crude oil shook off a morning slump and was up 3 percent at $32 a barrel at midday Wednesday following the release of some encouraging inventory data from the government.
APPLE CORED: Apple slumped after it said growth in iPhone sales slowed in the fourth quarter. It also predicted its first decline in revenue in 13 years for the current quarter. CEO Tim Cook said the strong dollar is hurting sales. The stock gave up $4.63, or 4.6 percent, to $95.37.
That helped perk up the beleaguered energy sector. Chevron added 1.5 percent.
GROUNDED: Aerospace and defense giant Boeing fell after its 2016 outlook came up short of analyst projections. Textron, which makes Cessna planes and Bell helicopters, also tumbled after its fourth-quarter profit and sales disappointed investors. Boeing stock lost $12.28, or 9.6 percent, to $115.73 and Textron fell $2.86, or 7.6 percent, to $34.87.
Technology stocks continued to lag the market after Apple predicted its first quarterly decline in revenue in 13 years.
BIOGEN BOUNCES: Biotech drugmaker Biogen rose after its fourth-quarter earnings were stronger than expected. It added $10.76, or 4.1 percent, to $270.63.
The Dow Jones industrial average edged up 32 points, or 0.2 percent, to 16,199.
FED PLANS: The Federal Reserve will wrap up its latest policy meeting Wednesday afternoon. In December it raised its main interest rate above zero, where it had been since 2008. Since then stocks have dropped, as have oil prices. That’s partly because investors are worrying about the global economy as growth in China slows down.
The Standard & Poor’s 500 index rose 8 points, or 0.8 percent, to 1,912. The Nasdaq composite dropped 13 points, or 0.3 percent, to 4,554.
At one time the Fed was expected to raise interest rates last September, but it held off and said market turmoil was one reason for that decision. Higher interest rates would tend to make the dollar even stronger, which makes imports cheaper but makes U.S. goods more costly in other countries.
NO TUPPERWARE PARTY: Tupperware’s fourth-quarter profit and sales fell far short of estimates, and its stock shed $8.35, or 16.2 percent, to $43.13.
TOTAL SYSTEM SLIDES: Electronic payment services provider Total System Services fell $5.30, or 11.5 percent, to $40.70 after its earnings fell short of estimates and it gave a weak profit forecast.
OIL PRICES: Benchmark U.S. crude fell 13 cents, or 0.4 percent, to $31.30 a barrel in New York. Brent crude, the benchmark for international oils, rose 17 cents to $31.92 a barrel in London.
BONDS, CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.02 percent from 2 percent. The euro rose to $1.0882 from $1.0853 and the dollar was little changed at 118.47 yen.
OVERSEAS: France’s CAC-40 was down 0.1 percent while Germany’s DAX rose 0.1 percent. Britain’s FTSE 100 was 0.4 percent higher. The Shanghai Composite Index fell 4 percent by midday before recovering to end down 0.5 percent, adding to Tuesday’s 6.4 percent loss. Japan’s Nikkei 225 rose 2.7 percent and Hong Kong’s Hang Seng was up 1 percent. South Korea’s Kospi gained 1.4 percent.
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Marley Jay can be reached at http://twitter.com/MarleyJayAP. His work can be found at http://bigstory.ap.org/journalist/marley-jay
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
