By Sara Sjolin, MarketWatch , Ryan Vlastelica
Boeing rallies after strong quarter and outlook
U.S. stocks were little changed on Wednesday, as a sharp decline
in Apple, the largest U.S. company by market cap, was offset by a
sharp rebound in the price of crude oil.
Major indexes had opened broadly lower, with all but one of the
S&P 500's primary sectors negative at one point. Apple led the
decline, and while it continued to see its biggest one-day drop
since June, the broader market recovered alongside energy stocks.
The S&P energy sector had fallen as much as 0.9% Wednesday
morning, though it subsequently turned higher, trading up 0.6% as
one of the biggest advancers of the day.
The recovery came after the Energy Information Administration
reported that domestic crude supplies unexpectedly fell in the
latest week
(http://www.marketwatch.com/story/oil-prices-turn-higher-after-eia-reports-unexpected-600000-million-barrel-decline-in-us-crude-supply-2016-10-26),
a positive sign for a market that continues to struggle with
oversupply. Crude, which had dropped about 2% at its lows of the
session, erased its decline.
The Dow Jones Industrial Average rose 60 points, or 0.3%, to
18,278, while the S&P 500 rose 2 points, or 0.1%, to 2,145. The
Nasdaq Composite Index , which is heavily weighted toward
technology names, remained down 3.5 points, or 0.1%, at 5,280.
The day was the latest session where overall market activity, in
terms of the swings of the major indexes, was extremely quiet.
(http://www.marketwatch.com/story/the-stock-market-has-reached-a-historic-level-of-quiet-2016-10-26)See:The
stock market has reached a historic level of quiet
(http://www.marketwatch.com/story/the-stock-market-has-reached-a-historic-level-of-quiet-2016-10-26)
Apple Inc.(AAPL) sank 2.6% a day after the iPhone maker posted
quarterly earnings
(http://www.marketwatch.com/story/apple-revenue-dips-but-rebound-expected-2016-10-25)
that slightly beat expectations and revenue that was just shy of
forecasts. Investors also may have been disappointed that the tech
giant's projections for the current quarter weren't more bullish.
The day's decline was on track to be Apple's biggest one-day drop
since April.
The stock's fall comes in the wake of a rally that lifted the
share price nearly 15% between early September and Tuesday.
"The quarter wasn't bad to me, but if you're going to report a
quarter after a rise of this much in this short of time, then it
has to be a powerful one. Instead, this was just lukewarm," said
Michael Binger, senior portfolio manager at Gradient Investments
LLC, which counts Apple as a holding.
"We continue to like the stock, and think the next 12 months
will see a big replacement cycle for the iPhone."
Read:Apple forecast disappoints, but shares are still a bargain,
analysts say
(http://www.marketwatch.com/story/apple-forecast-disappoints-but-shares-are-still-attractive-analysts-say-2016-10-26)
See also:This key Nasdaq gauge is topping out and Apple isn't
helping
(http://www.marketwatch.com/story/a-key-nasdaq-gauge-is-peaking-as-apple-starts-to-look-mushy-2016-10-26)
Apple's results overshadowed better-than-expected results
(http://www.marketwatch.com/story/boeings-stock-surges-after-profit-rises-well-above-expectations-2016-10-26)
from Boeing Co.(BA), which rose 1.4% after also raising its
outlook. Coca-Cola Co.(KO)said profit and revenue fell less than
expected in the latest quarter
(http://www.marketwatch.com/story/cokes-profit-and-revenue-decline-2016-10-26),
sending shares up 0.5% to $42.75. All three companies are Dow
components.
Read:5 difficult things OPEC must do if it really wants an oil
output cap
(http://www.marketwatch.com/story/5-things-opec-needs-to-do-to-reach-an-oil-output-pact-2016-10-24)
The market weakness on Wednesday comes after a downbeat day on
Tuesday
(http://www.marketwatch.com/story/us-stock-futures-point-to-gains-as-apple-set-to-take-the-spotlight-2016-10-25)
when worries about a string of lackluster earnings and a drop in
consumer sentiment sent major indexes lower.
Corporate news: Among other earnings, Southwest Airlines
Co.(LUV) slumped 11.5% after the carrier reported a drop in
third-quarter profit and revenue
(http://www.marketwatch.com/story/southwest-airlines-shares-climb-after-earnings-beat-2016-10-26).
Chipotle Mexican Grill Inc.(CMG) dropped 8% after the burrito chain
late Tuesday reported a 95% slump in third-quarter profit
(http://www.marketwatch.com/story/chipotle-gives-optimist-outlook-profit-down-95-2016-10-25).
Tesla Motors Inc.(TSLA) and Texas Instruments Inc.(TXN) are due
to report after the market close.
Read:Tesla third-quarter earnings--what to expect
(http://www.marketwatch.com/story/tesla-third-quarter-earnings-what-to-expect-2016-10-17)
On the upside, Twitter Inc.(TWTR) gained 1.3% following
speculation that Walt Disney Co.(DIS) has taken renewed interest in
buying the social media company
(http://www.marketwatch.com/story/twitter-shares-jump-on-rumor-of-renewed-disney-interest-2016-10-25).
In the latest economic data, new home sales
(http://www.marketwatch.com/story/new-home-sales-run-at-annual-593000-rate-in-september-as-market-grinds-slowly-higher-2016-10-26)
picked up in September, but hefty downward revisions to sales in
earlier months point to a market still struggling for momentum.
Investors are closely watching U.S. data, trying to gauge if the
readings strengthen or weaken the case for the Federal Reserve to
raise interest rates this year.
The probability of a Fed hike in November is low at only 8.3%,
according to the CME Group's Fed Watch tool
(http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html),
which measures pricing in the Fed funds futures market. However,
for December the tool is pointing to an almost 80% chance of a rate
increase.
See:
Other markets: Stocks in Asia closed mostly lower
(http://www.marketwatch.com/story/australian-wipeout-leads-asian-market-declines-2016-10-25),
and Europe followed suit with all major benchmarks mired in red
(http://www.marketwatch.com/story/european-stocks-down-for-third-straight-day-as-commodity-shares-pull-back-2016-10-26).
Metals traded mixed
(http://www.marketwatch.com/story/gold-futures-at-three-week-highs-as-dollar-stocks-wobble-2016-10-26),
with gold futures firming initially but now off 0.4% and silver
down 0.6%.
The ICE dollar index slipped 0.2%
(http://www.marketwatch.com/story/dollar-struggles-to-move-higher-aussie-dollar-surges-on-inflation-2016-10-26)
after touching its highest level in nearly nine months on
Tuesday.
(END) Dow Jones Newswires
October 26, 2016 11:24 ET (15:24 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.