While you were sleeping: Apple outlook delivers
By Margreet Dietz
Aug. 3 (BusinessDesk) - A better-than-expected outlook from Apple sent the stock to a record and pushed the Dow Jones Industrial Average above 22,000 points for the first time.
Apple shares rose as high as a record US$159.75 earlier in the session after the world’s most valuable company reported quarterly earnings and an outlook that exceeded expectations.
“With revenue up 7 percent year-over-year, we’re happy to report our third consecutive quarter of accelerating growth and an all-time quarterly record for Services revenue,” Tim Cook, Apple’s CEO, said in a statement.
Apple said it expects fiscal fourth-quarter revenue of between US$49 billion and US$52 billion.
"Apple, at he heart of it, has a lot of consumer exposure, and the consumer is in great shape," Mike Baele, managing director at US Bank Private Client Wealth Management in Portland, Oregon, told Reuters. “But we would like to see some capex.”
Even so, Wall Street was mixed. In 3.16pm trading in New York, the Dow Jones Industrial Average rose 0.2 percent. However, the Nasdaq Composite Index inched 0.04 percent lower. In 3.02pm trading, the Standard & Poor’s 500 Index was little changed from the previous day’s close.
Earlier in the day, the Dow climbed to a record 22,036.10.
Some investors are concerned the gains might not last.
"The market gain has been built on a narrow group of issues. That typically is not indicative of great health," Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, told Reuters. "I would not be shocked ... if we saw a pullback."
Gains in shares of Apple and those of McDonald’s, recently up 5.4 percent and 1.2 percent respectively, led the Dow higher. Keeping a lid on the advance were declines in shares of Walt Disney and those of Verizon, recently down 2.1 percent and 1.8 percent respectively.
Restaurant Brands International posted quarterly profit that exceeded expectations, bolstered by its Burger King brand, though sales at Tim Hortons and Popeyes fell short of the mark.
Comparable sales at Burger King rose 3.9 percent, while those at Tim Hortons slipped 0.8 percent and those at Popeyes fell 2.7 percent.
"We had notable strength at Burger King with both strong comparable sales growth and net restaurant growth,” Daniel Schwartz, chief executive officer, said in a statement. “We also made good progress integrating Popeyes and continue to be excited about the long term growth potential for the brand.”
The stock traded 0.1 percent higher at US$59.30 as of 2.07pm in New York, after rising as high as US$60.78 and falling as low as US$57.95 earlier in the day.
Meanwhile, the latest US jobs data offered fresh signs of strength. An ADP Research Institute report showed US private employers added 178,000 jobs last month, following an upwardly-revised increase of 191,000 jobs in June.
“The American job machine continues to operate in high gear,” Mark Zandi, chief economist at Moody’s Analytics in West Chester, Pennsylvania, said in a statement, Bloomberg reported. Moody’s produces the figures with ADP.
“Job gains are broad-based across industries and company sizes, with only manufacturers reducing their payrolls," Zandi noted. "At this pace of job growth, unemployment will continue to quickly decline.”
Attention now turns to the government’s nonfarm payrolls data, scheduled for release on Friday, which is expected to show that US employers added about 180,000 workers in July.
In Europe, the Stoxx 600 Index finished the session with a decline of 0.4 percent from the previous close. The UK’s FTSE 100 Index fell 0.2 percent, while France’s CAC 40 Index shed 0.4 percent, and Germany’s DAX Index dropped 0.6 percent.