Wall St lower as Apple drag outweighs trade, jobs data boost

US stocks gave up early gains to trade lower on Friday, after Apple’s disappointing forecast. (AFP pic)

NEW YORK: US stocks gave up early gains to trade lower on Friday, after Apple’s disappointing forecast added to fears of slowing corporate growth, outweighing a boost from healthy economic data and trade optimism.

Apple Inc’s shares tumbled 6.7%, taking its market value below US$1 trillion, after the iPhone maker warned sales for the crucial holiday quarter may miss expectations.

That dragged down shares of its US suppliers, mostly chipmakers, and helped pull the technology sector 1.98% lower, putting it on track to snap a three-day rally.

“Investors are looking at risk on, but they are doing it in a cautionary approach. They aren’t rushing back into big FAANG type names,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

“It’s something to watch, because you need those names to participate in the overall market if it’s going to move much higher as they are big dollar prices.”

Earlier in the session, the market got a boost from a Bloomberg report that President Donald Trump wanted to reach a trade deal with China later this month, but a CNBC report said a senior US official called the report untrue.

Jobs data was also healthy, with the Labor Department’s closely watched report showing job growth rebounded sharply in October, pointing to further labour market tightening that could encourage the Federal Reserve to raise rates in December.

The prospect of higher borrowing rates was one of the factors, along with tariffs and slowing global growth, that triggered a tumble in the stock markets last month.

At 11.38am ET, the Dow Jones Industrial Average was down 109.09 points, or 0.43%, at 25,271.65, the S&P 500 was down 18.68 points, or 0.68%, at 2,721.69. The Nasdaq Composite was down 83.89 points, or 1.13%, at 7,350.16.

Apple aside, most earnings reports were strong.

Exxon Mobil Corp climbed 1.4% and Chevron Corp gained 3.8% after reporting strong profits.

Starbucks Corp jumped as much as 12% to a record high after the coffee chain reported strong sales in the United States and China.

“You have other areas of the market that are acting well, but not well not enough to counterbalance the effects of Apple today,” SlateStone Wealth’s Pavlik said.

Kraft Heinz Co tumbled 10%, the most on the S&P, after the company missed quarterly earnings estimates on steep commodity costs.

Declining issues outnumbered advancers for a 1.22-to-1 ratio on the NYSE and for a 1.04-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and four new lows, while the Nasdaq recorded 34 new highs and 28 new lows.