Apple lifts Wall Street higher; Fed decision on the horizon
(Reuters) – U.S. stocks rose on Wednesday on a boost from Apple’s upbeat earnings report, but a drop in chip stocks capped gains, while investors awaited a widely expected interest rate cut by the Federal Reserve.
Shares of the iPhone maker (AAPL.O) were up about 5.11% after the company beat quarterly profit and revenue expectations, and forecast strong sales for the current quarter.
Apple said its greater China sales dipped only slightly, easing concerns around the impact of the U.S.-China trade war.
This helped the technology sector .SPLRCT rise 0.48%, but a 8.56% slide in shares of Advanced Micro Devices Inc (AMD.O) kept a lid on gains.
The semiconductor maker forecast third-quarter revenue below expectations, hit by lower demand for its chips used in gaming consoles, pushing the Philadelphia Semiconductor index .SOX down 1.18%.
“Multinational companies have been hit by the trade war, but with a positive on Apple, it does take some of fears away from the impact of the dispute,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The U.S.-China trade talks concluded on Wednesday without any major breakthrough, a day after global stocks lost footing as President Donald Trump warned Beijing against trying to wait out his first term in office to finalize a deal.
The Chinese commerce ministry said the two sides will meet again in the United States in September, which the White House confirmed.
Meanwhile, market participants are expecting a quarter-percentage-point cut in borrowing costs by the U.S. central bank. All eyes will now be on Fed Chairman Jerome Powell, who is set to hold a news conference after the rates decision at 2 p.m. EDT (1800 GMT), to explain why the move was necessary and what comes next.
Investors are looking at Powell to appropriately justify his move by pointing to global growth being hurt by the U.S.-China trade war, Cardillo said.
Wall Street’s main indexes have had a strong run since a steep selloff in May, with the S&P 500 index .SPX now up 20% for the year on hopes that a modest rate cut would help combat slowing growth and boost tame inflation.
The Nasdaq Composite .IXIC added 6.63 points, or 0.08%, to 8,280.24.were up 11 points, or 0.14%
Electronic Arts Inc (EA.O) jumped 7%, the most among S&P 500 companies, after the video game publisher posted quarterly revenue beat, riding on the continued success of its battle royale game “Apex Legends”.
Beer maker Molson Coors Brewing Co (TAP.N) slid 7.29%, the most on the benchmark index, after its quarterly net sales and profit missed estimates on weak demand. The company also said its Chief Executive Officer Mark Hunter was retiring.
The ADP National Employment Report, showed private employers added 156,000 jobs in July, above economists’ expectations and supporting the view of a firm domestic labor market. This comes ahead of the Labor Department’s more comprehensive monthly non-farm payrolls data due on Friday.
Advancing issues outnumbered decliners by a 1.21-to-1 ratio on the NYSE and by a 1.15-to-1 ratio on the Nasdaq.
The S&P index recorded 24 new 52-week highs and one new low, while the Nasdaq recorded 63 new highs and 30 new lows.
Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur