Apple Drags Stocks Lower; High-Dividend Companies Also Dip

(AP) -
markets, stocks, wall street, dow, s&p

U.S. stocks are slipping Friday as a big loss from Apple drags technology companies lower and an increase in interest rates hurts high-dividend companies. The world’s largest technology company forecast weak revenue and said it will stop disclosing quarterly iPhone sales, and it’s on track for its biggest loss since January 2014.

Stocks had surged over the previous three days and they’re still on pace for a big weekly gain after they skidded in October.

The federal government said employers added 250,000 jobs in October, far more than analysts had expected. Hourly pay jumped 3.1 percent, the most since the beginning of 2009.

KEEPING SCORE: The S&P 500 index slid 21 points, or 0.8 percent, to 2,718 as of 11:45 a.m. ET. The Dow Jones Industrial Average fell 138 points, or 0.6 percent, to 25,241.

The Nasdaq composite, which has a high concentration of technology companies, lost 87 points, or 1.2 percent, to 7,346. The Russell 2000 index of smaller-company stocks slipped 2 points, or 0.1 percent, to 1,543.

The S&P 500 rose 3.8 percent over the previous three days, but would have to rise another 7.8 percent to match the all-time high it reached on Sept. 20.

JOBS, JOBS, JOBS: The Department of Labor said U.S. employers continued to add jobs at a quick clip in October, with no sign that hiring was going to slow down. The proportion of Americans with jobs is at its highest level since January 2009, and the monthly increase in pay was also the largest since then. Along with high consumer confidence, those are all good signs for economic growth and consumer spending in the months to come.

Bond prices dropped. The yield on the 10-year Treasury note jumped to 3.20 percent from 3.14 percent. That hurt high-dividend companies, which made big gains in October during the market’s slump.

APPLE CORED: Apple’s sales in its latest quarter and its estimates for the year-end shopping season both disappointed experts. The tech giant also surprised investors by saying it will no longer disclose the number of iPhones it sells each quarter. Apple was unique among big smartphone makers in saying how many phones it sold and what the average price was. Apple gets most of its revenue from iPhone sales and lately it’s boosted its profits by selling higher-priced models.

The unexpected change raised suspicions that Apple might be trying to mask a downturn in the phone’s popularity. The company says the quarterly numbers and prices didn’t necessarily tell investors how strong its business has been.

Apple sagged 6.9 percent to $206.93. Chipmakers also fell. Qorvo lost 5.1 percent to $74.47 and Broadcom fell 3.9 percent to $220.96.

TRADE UPDATE: The governments of the U.S. and China both said they were making some progress in trade talks. It’s been months since the two sides made any visible progress, and fears that the dispute was getting worse contributed to the big losses for global stocks in October. Chinese state media also said President Xi Jingping promised tax cuts and other help to China’s entrepreneurs in a renewed effort to revive the state-dominated economy.

Germany’s DAX rose 0.6 percent and the CAC 40 in France added 0.4 percent. Britain’s FTSE 100 was little changed.

Asian stock indexes skyrocketed. The Hang Seng index in Hong Kong soared 4.2 percent and Japan’s Nikkei 225 index surged 2.6 percent, while South Korea’s Kospi climbed 3.5 percent.

SWEET BREW: Starbucks’ sales were better than expected, and customers spent more after it raised prices for brewed coffee. It said revenue from cold drinks improved as well, and revenue also improved in China. The stock jumped 9.3 percent to $64.11.

Security-software company Symantec also climbed after it did better than Wall Street had expected in its fiscal second quarter. Its stock rose 8.3 percent to $20.29. Insurance company MetLife gained 4.6 percent to $43.87 after it posted a larger profit than analysts had expected in the third quarter.

MELTED CHEESE: Kraft Heinz sank 9.9 percent to $50.66 after its profit in the third quarter fell far short of analyst forecasts. The company said that costs grew, and it’s continuing to make major investments in its business. Prices in the U.S. fell as stores ramped up discounts, especially for cheeses and drinks.

Other food companies also fell. General Mills lost 5.2 percent to $42.01 and Conagra Brands shed 2.4 percent to $34.77.

ENERGY: Oil prices continued to slip. Benchmark U.S. crude fell 0.7 percent to $63.26 a barrel in New York and Brent crude added 0.2 percent to $72.98 a barrel in London.

CURRENCIES: The dollar rose to 113.02 yen from 112.69 yen. The euro slipped to $1.1395 from $1.1409.