Dow, S&P 500 higher; Nasdaq dragged down by AppleWednesday, September 11th, 2013
U.S. stocks were mostly higher on Wednesday as investors were encouraged after President Obama put off a Congress vote for military action in Syria, but Apple shares still weighed on the Nasdaq, pushing the tech-heavy index into negative territory.
As of midday, the Dow Jones Industrial Average extended its gains into a third session, rising 81 points to 15,273, while the S&P 500 edged up 1 point to 1,685. The Nasdaq fell 10 points, or 0.27%, to 3,719.
A series of analysts on Wall Street downgraded Apple (NASDAQ:AAPL), citing a lack of catalysts and iPhone disappointment. Bank of America Merrill Lynch analyst Scott D. Craig, who downgraded Apple to neutral, wrote that his reasons included a lack of a “lower end iPhone and price points that will be too high to increase penetration in emerging markets”, as well as no China Mobile agreement, and another “evolutionary but not revolutionary” iPhone product launch. Credit Suisse analysts also downgraded the tech company to neutral, saying they “remain disappointed with Apple‘s decision to remain a premium priced smartphone vendor”, which continues to competitively expose the company and limits its growth. The U.S. company’s shares were down more than 5.6%, at $466.89 at the time of writing, its lowest price in a month.
Investors were also keeping an eye on developments in Syria, after President Barack Obama asked Congress to delay any vote on military action in the Middle Eastern nation, while the U.S., Russia and Syria discuss a proposal for the latter country to give up its chemical weapons. Obama, during a televised address last night, still made his case for military action, though added that the recent developments could potentially remove the threat of chemical weapons “without the use of force”.
European markets finished higher, with the DAX in Germany leading gains, while in Asia, markets ended mixed.
On Tuesday, U.S. markets rallied on reduced prospects for a strike in Syria, with the Dow scoring another triple digit gain, closing up 127.94 points, or 0.85%, at 15,191.06, while the S&P 500 continued its longest win streak since mid-July and the Nasdaq settled at a level not seen since 2000. With the strong run recently, it’s not surprising that investors are pulling back, with markets awaiting next week’s Federal Open Market Committee meeting, with expectations that a tapering of the central bank’s monetary easing program could be announced.
It was a light data day on Wednesday, with traders offering muted reaction to wholesale inventories and sales in July, which both rose 0.1%.
On the corporate front, Verizon Communications (NYSE:VZ) has launched the biggest corporate bond sale on record, selling as much as $49 billion in bonds to help finance the $130 billion purchase of its stake in Verizon Wireless from Vodafone (NASDAQ:VOD). Shares of Verizon edged down at last check.
Meanwhile, the Canadian and Ontario goverments are selling 30 million common shares in GM (NYSE:GM) in a block trade to Bank of America (NYSE:BAC) and RBC Capital Markets (NYSE:RY) in a deal valued at around $1.1 billion.
In other news, News Corp. (NASDAQ:NWSA), the publisher of the Wall Street Journal, gained 1.1% after Southeastern Asset Management, the investment firm that joined Carl Icahn in opposing Dell Inc. (NASDAQ:DELL)’s buyout, acquired a 12 percent voting stake in the company, making it the largest shareholder after chairman Rupert Murdoch.
In commodities, gold for December delivery fell $1 to $1,363 an ounce, while October crude rose 59 cents to $107.99 a barrel after a small 0.2 million barrel draw in oil inventories in the September 6 week to 360.0 million. Gasoline inventories were up 1.7 million barrels with distillates up 2.6 million.