Wall Street reverses three-day rally as Apple falls, trade optimism fades
NEW YORK (Reuters) – U.S. stocks were on track to snap a three-day rally on Friday after White House economic adviser Larry Kudlow weakened optimism over U.S.-China trade talks and as Apple shares dropped following a disappointing forecast.
While President Donald Trump would meet China President Xi Jinping this month, he has not asked U.S. officials to draw up a proposed trade plan, Kudlow told CNBC, contradicting a report earlier in the day that had buoyed hopes of a trade dispute resolution.
Stocks extended losses following the news, with the trade-sensitive industrial sector .SPLRCI, which was up as much as 1.13 percent earlier, falling to a session low. It was last down 0.1 percent.
“That tells you tariffs are still a factor, and from the reaction we saw there, that tells me it’s heavier weighting in the investment decision than what people were anticipating before,” said Michael Matousek, head trader at U.S. Global Investors Inc in San Antonio, which manages about $1.3 billion.
Apple Inc (AAPL.O) tumbled 7.2 percent, taking its market value below $1 trillion, after the iPhone maker warned sales for the crucial holiday quarter may miss expectations.
That dragged down shares of its U.S. suppliers, mostly chipmakers, and pushed the S&P technology sector .SPLRCT lower.
The Dow Jones Industrial Average .DJI fell 164.96 points, or 0.65 percent, to 25,215.78, the S&P 500 .SPX lost 23.35 points, or 0.85 percent, to 2,717.02 and the Nasdaq Composite .IXIC dropped 93.14 points, or 1.25 percent, to 7,340.92.
Economic data was healthy, with the Labor Department’s payrolls report showing job growth rebounded sharply in October, pointing to further labor market tightening that could encourage the Federal Reserve to raise benchmark interest rates in December.
Other earnings reports were more upbeat.
Chevron Corp (CVX.N) gained 2.9 percent after reporting its quarterly profit doubled on record oil and gas production.
Starbucks Corp (SBUX.O) jumped to a record high after the coffee chain reported strong sales in the United States and China.
Declining issues outnumbered advancing ones on the NYSE by a 1.47-to-1 ratio; on Nasdaq, a 1.06-to-1 ratio favored decliners.
The S&P 500 posted 8 new 52-week highs and five new lows; the Nasdaq Composite recorded 38 new highs and 43 new lows.
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