Wall Street gains on Apple boost, easing trade worries

A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New YorkA trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York
A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., July 31, 2018. REUTERS/Lucas Jackson

By Amy Caren Daniel

(Reuters) – U.S. stocks rose on Wednesday as Apple’s robust earnings lifted the high-growth technology sector and eased worries of an escalating trade war between the United States and China.

Apple jumped 5.8 percent to hit a record $201.32, inching closer to become the world’s first trillion-dollar company after forecasting blowout current-quarter sales.

Its earnings provided some relief after results from marquee names such as Facebook and Netflix fanned worries about the growth of high-flying companies.

Members of the so-called FAANG group rose. Facebook, Netflix, Amazon.com and Google-parent Alphabet were trading up between 0.9 percent and 1.7 percent.

The technology sector rose 1.07 percent. Five of the 11 major S&P sectors were higher.

“Apple was a good way to end tech earnings as it was the last major company in that sector to come out with results, and people viewed that as a positive,” said Daniel Morgan, portfolio manager at Synovus Trust in Atlanta.

The Trump administration plans to propose tariffs of 25 percent, instead of the initially proposed 10 percent, on $200 billion worth of imported Chinese goods. Beijing vowed to retaliate if the United States slapped further tariffs.

“At this point we have to view tariffs as some sort of wild card. We’re going to have some winners and losers and it’s a question of what the impact is actually going to be,” said Morgan

The trade-sensitive industrial index fell 0.7 percent. Caterpillar slipped 2.8 percent and 3M declined 1.5 percent. Both stocks were the biggest drags on the Dow.

Also hurting sentiment was a 1.47 percent fall in the energy group weighed by a clutch of weak earnings reports and a fall in crude oil prices.

Devon Energy dropped 5.2 percent and was among the biggest decliners on the S&P, while Chesapeake Energy declined 7.7 percent. Both companies posted disappointing quarterly results.

At 11:22 a.m. EDT the Dow Jones Industrial Average was down 1.87 points, or 0.01 percent, at 25,413.32, the S&P 500 was up 2.75 points, or 0.10 percent, at 2,819.04 and the Nasdaq Composite was up 36.32 points, or 0.47 percent, at 7,708.11.

Financials rose 0.53 percent after yields on the benchmark 10-year Treasury notes hit 3 percent for the first time since June 13, according to Reuters data.

Among stocks, Akamai Technologies dropped 6.4 percent after its forecast for third-quarter revenue missed expectations.

Also in focus is the Federal Reserve, which is expected to keep interest rates unchanged in an announcement at 2 p.m. ET at the end of its meeting. The market expects another two rate hikes this year.

Declining issues outnumbered advancers for a 1.80-to-1 ratio on the NYSE and for a 1.00-to-1 ratio on the Nasdaq.

The S&P index recorded 12 new 52-week highs and one new low, while the Nasdaq recorded 46 new highs and 55 new lows.

(Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta)