S&P 500, Nasdaq rise as Apple hits US$1 trillion mark

An electronic screen displays the Apple stock price at the Nasdaq Market Site in New York City.
An electronic screen displays the Apple stock price at the Nasdaq Market Site in New York City.PHOTO: REUTERS
Apple's market value topped $1 trillion and sparked a rebound in tech stocks that boosted the Nasdaq and S&P 500. VIDEO: REUTERS

NEW YORK (REUTERS) – Technology stocks pushed the S&P 500 and Nasdaq higher on Thursday (Aug 2), driven by Apple shares as the iPhone maker became the first publicly traded US company worth a trillion dollars (S$1.3 trillion).

Apple extended its post-earnings rally, gaining 2.9 per cent and pushing its market value across the trillion-dollar threshold.

“It’s a good sign for the market and the economy,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh. “Because even though today we’re talking about the impact of trade or currency war, an issue with China, Apple, who makes most of their products in China, is hitting this.” 

The smartphone maker led the S&P technology index 1.4 per cent higher, the biggest percentage gainer among the 11 major sectors of the S&P 500.

Among the other members of the so-called FAANG group of momentum stocks, Facebook Inc rose 2.7 per cent, Alphabet Inc edged up 0.7 per cent, Netflix rose 1.8 per cent and Amazon.com advanced 2.1 per cent.

The tech sector’s gain helped offset escalating trade tensions, as China urged the United States to “calm down” after US Trade Representative Robert Lighthizer said he had been directed to increase previously proposed tariffs on Chinese imports. 

At a news briefing, China’s foreign ministry spokesman called the United States’ tactics “blackmail.” 

“The tariff rhetoric is always important to monitor,” said Bucky Hellwig, senior vice-president at BB&T Wealth Management in Birmingham, Alabama. “But more importantly, what’s the effect on the market?”

“We get a sell-off on some event, and the market comes right back,” Hellwig added.

 

Trade-sensitive industrial companies, including Boeing and Caterpillar, helped drag the blue-chip Dow slightly lower.

The Dow Jones Industrial Average fell 7.66 points, or 0.03 per cent, to 25,326.16, the S&P 500 gained 13.86 points, or 0.49 per cent, to 2,827.22 and the Nasdaq Composite added 95.40 points, or 1.24 per cent, to 7,802.69.

Shares of Tesla jumped 16.2 per cent after quarterly results convinced investors of future profitability and chief executive Elon Musk apologised for his behaviour on the previous earnings call.

For the second-quarter reporting season, 79.7 per cent of the 380 companies in the S&P 500 that reported so far have beaten consensus estimates, according to Thomson Reuters data.

Chemical producer DowDuPont Inc posted profit that beat consensus estimates for the fourth straight quarter, driven by price increases and strong demand. But its stock fell 2.2 per cent after the company warned of rising raw materials costs.

On the deal front, Cisco Systems Inc announced it would buy venture capital-backed cyber security firm Duo Security for US$2.35 billion in cash. Cisco stock rose 1.6 per cent on the news.

Advancing issues outnumbered declining ones on the NYSE by a 1.41-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favoured advancers.

The S&P 500 posted 14 new 52-week highs and five new lows; the Nasdaq Composite recorded 93 new highs and 100 new lows.

Volume on US exchanges was 6.66 billion shares, compared with the 6.25 billion-share average over the last 20 trading days.