Apple results boost stocks, dollar dips
Global equities advanced on Wednesday for a fourth-straight day of gains as Apple`s strong results soothed concerns about earnings growth and the dollar dipped after some disappointing data ahead of a Federal Reserve policy statement.
Apple shares jumped more than 6% to keep all three major Wall Street indexes on the plus side as the top boost. The iPhone maker beat depressed expectations despite a record drop in phone revenue, gave an upbeat assessment of its China business, said it would buy back $75 billion in shares and hiked its dividend. The gains pushed Apple closer to the $1 trillion market capitalization yet again.Sentiment also received a boost from early data on the labor market, as a report by payrolls processor ADP showed U.S. private employers added 275,000 jobs in April, well above the 180,000 estimate.
But gains were pared shortly after the open as reports on construction spending and U.S. manufacturing came in weaker than expected, sending conflicting signals about the strength of the economy.
Earnings are now expected to show growth of 0.5% for the quarter, according to Refinitiv data. At the start of April, earnings were expected to decline by 2%, sparking some concerns about the possible start of an earnings recession.
"Many were expecting an earnings recession and we haven`t had that and we`re still positive on growth," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
"It`s been a good earnings season overall, Apple could potentially be positive for the tech sector overall."
The Dow Jones Industrial Average rose 63.77 points, or 0.24%, to 26,656.68, the S&P 500 gained 3.98 points, or 0.14%, to 2,949.81 and the Nasdaq Composite added 33.58 points, or 0.41%, to 8,128.97.
Trading was thin in Europe, with most markets closed for the May Day holiday and only London and Copenhagen open for trading.
The pan-European STOXX 600 index lost 0.07% and MSCI`s gauge of stocks across the globe gained 0.18%.
The weaker data on construction and manufacturing dented the dollar and U.S. Treasury yields fell to their lowest since April 11 ahead of the policy statement from the Fed scheduled for 2:00 p.m ET (1800 GMT).
The central bank is likely to keep rates unchanged as it maintains a `patient` monetary policy stance amid strong economic growth, despite calls from President Donald Trump recently to cut interest rates and renew its quantitative easing program.
Chairman Jerome Powell`s comments after the policy announcement will be closely monitored for clues on the Fed`s thinking about the state of the economy and direction of rates.
The dollar index fell 0.19%, with the euro up 0.28% to $1.1246.
Benchmark 10-year notes last rose 10/32 in price to yield 2.473%, from 2.507% late on Tuesday.
Oil prices declined after data from the U.S. Energy Information Administration showed U.S. crude production output set a new record last week.
U.S. crude fell 1.3% to $63.08 per barrel and Brent was last at $71.62, down 0.61% on the day.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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