US stocks fall on reported cut in Apple spending

NEW YORK: Wall Street stocks fell yesterday (July 18) after an early rally petered out following a report that Apple plans to trim spending and hiring.

Equities began well after solid Goldman Sachs results and markets appeared poised to extend Friday’s positive momentum following commentary from banks expressing confidence in US economic resiliency.

But the trend reversed after Bloomberg News reported that Apple was pulling back on some investments in preparation for a potential economic slowdown. Apple shares dropped 2.1%.

Analysts also pointed to a jump in oil prices and to the premium in the yield of short-term Treasury bonds over longer-term issues that is seen as a prognosticator of recessions.

The Dow Jones Industrial Average lost 0.7% to finish at 31,072.61.

The broad-based S&P 500 fell 0.8% to 3,830.85, while the tech-rich Nasdaq Composite Index also shed 0.8% to 11,360.05.

“Investors are becoming cautious again,” said Peter Cardillo of Spartan Capital Securities. “I guess investors are looking for more convincing data that the earnings season is not going to be all that bad.”

Goldman Sachs climbed 2.5% as it reported a 48% drop in quarterly earnings to US$2.8 billion (RM12.4 billion) after setting aside more funds in case of bad loans. However, results topped analyst expectations following a strong performance in trading.

Boeing ended flat after initially surging on its announcement that Delta agreed to buy 100 medium-haul Boeing MAX passenger aircraft worth a combined US$13.5 billion. Delta rose 3.4%

This week's earnings calendar includes results from Netflix, Johnson & Johnson and Tesla. – AFP

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