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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Apple surges on iPhone sales; stock indexes wobble

By Marley Jay Associated Press

NEW YORK – Investors didn’t react much to a strong hiring survey or the Federal Reserve’s decision to leave interest rates unchanged Wednesday, and U.S. stocks finished little changed Wednesday. Apple soared after it said iPhone sales improved in its latest quarter.

Stocks jumped in morning trading after payroll provider ADP said hiring by private employers grew stronger in January. Bond prices climbed. But the market’s gains thinned, partly because investors sold shares of companies that pay big dividends as bond yields rose.

Stocks briefly turned higher after the Fed’s announcement, but that also faded. The only constant was the big gain for Apple, which pushed technology companies higher.

The Federal Reserve left its key interest rate unchanged, just as investors expected. The central bank noted that the job market is getting stronger and inflation is gradually rising, but said it wants more time to monitor the economy.

That’s what investors expected. Kate Warne, an investment strategist for Edward Jones, noted that the central bank just increased rates in December and the Trump administration’s spending and fiscal plans still haven’t been spelled out.

“They’ll wait until they actually know what’s going to happen,” she said of the Fed.

The Dow Jones industrial average rose 26.85 points, or 0.1 percent, to 19,890.94. The Standard & Poor’s 500 inched up 0.68 points to 2,279.55. The Nasdaq composite, which has a high concentration of technology companies, gained 27.86 points, or 0.5 percent, to 5,642.65. The Russell 2000 index of smaller company stocks dipped 0.60 points to 1,361.23. Most stocks listed on the New York Stock Exchange fell.

Apple made its biggest one-day jump six months after its first-quarter profit and sales were better than analysts expected. The company said consumers snapped up its new iPhone 7 and 7 Plus, and that ended the first-ever slump in iPhone sales. Apple stock rose $7.44, or 6.1 percent, to $128.79. Apple was singlehandledly responsible for the Dow gain and it helped take technology stocks higher.

Investors haven’t focused on company earnings recently because of the flood of political news and other factors, but Warne said results like Apple’s will help the market.

“The fact that we’re seeing solid earnings and they’re coming in better than expected … will help sustain stocks over time,” she said.

Chipmaker Advanced Micro Devices reported a profit when analysts expected a loss, and its sales were greater than expected. Its stock climbed $1.69, or 16.3 percent, to $12.06.

The ADP jobs survey was better than expected, and the construction, manufacturing, health care and shipping industries all added jobs at a solid pace. The U.S. government will release its own monthly jobs report Friday.

Investors reacted to the hiring report by selling bonds, which are relatively safe investments that are in greater demand when the economy seems weaker. The yield on the 10-year Treasury note rose to 2.48 percent from 2.44 percent.

Stocks that pay large dividends traded lower as bond yields rose. Dominion Resources dropped $4.43, or 5.8 percent, to $71.85. Dominion also released a weak quarterly report.

Oil prices stayed within a small range. U.S. crude added $1.07, or 2 percent, to close at $53.88 a barrel in New York. Brent crude, the benchmark for international oil prices, gained $1.22, or 2.2 percent, to $56.80 a barrel in London. U.S. oil has stayed between roughly $52 and $55 a barrel for the last two months.

The S&P 500’s energy company index fell for the fifth day in a row. It’s down almost 3.5 percent over that time and has sunk 7 percent since Dec. 13.

Lightweight aluminum products maker Arconic surged after its largest shareholder said the company needs new leadership. Elliott Management nominated five potential directors to Arconic’s board. The company said it stands by CEO Klaus Kleinfeld and that Elliott’s moves are not in the best interest of all shareholders.

Since Arconic split from Alcoa on Nov. 1, Arconic stock was almost flat and Alcoa has jumped almost 70 percent. Arconic gained $2.55, or 11.2 percent, to $25.28.

The dollar rose to 113.09 yen from 112.76 yen. The euro fell to $1.0744 from $1.0803.

In other energy trading, wholesale gasoline rose 3 cents, or 1.9 percent, to $1.58 a gallon. Heating oil added 4 cents, or 2.6 percent, to $1.67 a gallon. Natural gas rose 5 cents, or 1.6 percent, to $3.17 per 1,000 cubic feet.

The price of gold slipped $3.10 to $1,208.30 an ounce. Silver lost 9 cents to $17.45 an ounce. Copper fell 2 cents to $2.71 1 pound.