Stocks end a strong week with losses as Apple shares slide
Stocks end a strong week with losses as Apple shares slide
US stocks fell on Friday when Apple absorbed its worst loss in more than four years. Thanks to the gains over the previous three days, the S & P 500 index ended with its largest weekly increase since March.
Apple, the world's largest technology company, predicted weak revenue in the current quarter and surprised investors by saying it will stop revealing iPhone quarterly sales. That caused the technological actions to fall. Other high-growth stocks held up well after the United States and China said they had made some progress in trade negotiations, and Asian indices increased in reports that the Chinese government plans to reduce taxes.
The Labor Department said employers added 250,000 jobs in October, with no sign that hiring will decline. The proportion of Americans with jobs is at its highest level since January 2009, and hourly wages have also grown more since then. Together with the high confidence of consumers, these are positive signs for economic growth and consumer spending in the coming months.
Bond yields rose after the solid jobs report, as investors bet on continued economic growth, which would push the Federal Reserve to raise interest rates more quickly.
"Clearly it was a good report," said David Lefkowitz, senior equity strategist at Americas at UBS Global Wealth Management.
The growth in wages, although stronger than all that has been reported recently, was about what investors expected, said Lefkowitz. That's important because investors remain sensitive to signs that inflation could explode, forcing the Federal Reserve to be more aggressive in raising rates. If inflation grows moderately, as it did in October, it is not as likely.
The S & P 500 index fell 17.31 points, or 0.6 percent, to 2,723.06. The Dow Jones Industrial Average fell 109.91 points, or 0.4 percent, to 25,270.83.
The Nasdaq compound, which has a high concentration of technology companies, lost 77.06 points, or 1 percent, to 7,356.99. The Russell 2000 index of shares of smaller companies rose 3 points, or 0.2 percent, to 1,547.98.
Stocks rose during the previous three days and ended the week 2.4 percent more. They skated in October, suffering their worst monthly loss in seven years. The S & P 500 will have to raise another 7.6 percent to equal the historic high reached on September 20.
The prices of the bonds fell, the sending of yields much higher. The yield on the 10-year Treasury note jumped to 3.22 percent, from 3.14 percent. An increase in interest rates last month started the market slowdown, but investors on Friday did not seem so worried. Interest rates will also be focused when the Federal Reserve meets next week. It is not expected to raise rates in November.
Apple's sales in its last quarter and its estimates for the holiday season disappointed investors. Other major smartphone brands do not reveal how many phones sell each quarter or what the sales price is. The change raised suspicions that Apple may be trying to mask a slowdown in the phone's popularity. The company says quarterly figures do not necessarily tell investors how strong their business has been.
Apple gets most of its revenue from iPhone sales and has recently increased its profits by selling higher-priced models.
Apple sank 6.6 percent to $ 207.48. The chip makers also fell. Qorvo lost 5.7 percent to $ 74 and Broadcom fell 4 percent to $ 220.77.
The governments of the United States and China said they were making progress in the trade negotiations. Months have passed since the two sides made visible progress and fears that the dispute would worsen contributed to the big losses for global markets in October. Chinese state media also said that President Xi Jingping promised tax cuts and other aid to Chinese businessmen.
"In September, before the profit season began (...) the market was a little satisfied with the tariff issues," Lefkowitz said. "It's something that I think the market was ignoring and now it's more in tune."
Germany's DAX rose 0.4 percent and CAC 40 in France added 0.3 percent. Britain's FTSE 100 fell 0.3 percent.
The Hang Seng index in Hong Kong rose 4.2 percent and the Nikkei 225 index in Japan rose 2.6 percent, while Kospi in South Korea rose 3.5 percent.
Starbucks sales were better than expected and customers spent more after the prices of processed coffee rose. He said that income from cold drinks also improved, and income also improved in China. The stock rose 9.7 percent to $ 64.42, its biggest gain since 2011.
Kraft Heinz sank 9.7 percent to $ 50.73 after its third-quarter earnings fell short of analysts' forecasts. Meat maker Oscar Mayer, Velveeta gelatin pudding and cheese said the costs have increased and he continues to make significant investments in his business. Prices in the United States fell as stores increased discounts, especially for cheeses and beverages. That led to his worst loss in three years.
The dollar rose to 113.28 yen from 112.69 yen. The euro fell to $ 1.1398 from $ 1.1409.
Oil prices continued to fall. US benchmark crude fell 0.9 percent to $ 63.14 a barrel in New York and Brent crude lost 0.1 percent to $ 72.83 a barrel in London.
Wholesale gasoline lost 0.5 percent to $ 1.71 per gallon and heating oil dropped 1.3 percent to $ 2.17 per gallon. Natural gas increased 1.5 percent to $ 3.28 per 1,000 cubic feet.
Gold fell 0.4 percent to $ 1,233.30 an ounce. Silver fell 0.1 percent to $ 14.75 an ounce. Copper rose 3.1 percent to $ 2.81 a pound.
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AP Markets writer Marley Jay can be contacted at http://twitter.com/MarleyJayAP
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