Worries about interest rates, Apple hit US stocks

A customer looks at her Apple iPhone X at an Apple store in New York in 2017.
A customer looks at her Apple iPhone X at an Apple store in New York in 2017.PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks finished the week on a downcast note, falling on Friday (April 20) on worries about higher interest rates and tech giant Apple's prospects.

The Dow Jones Industrial Average dropped 0.8 per cent to close the week at 24,462.94.

The broad-based S&P 500 shed 0.9 per cent to end at 2,670.14, while the Nasdaq Composite Index tumbled 1.3 per cent to 7,146.13 following a big decline in Apple, the biggest company by market capitalisation.

The yield on the 10-year US Treasury rose ever closer to 3 per cent, jumping 1.3 points to 2.95 per cent, reigniting fears that Federal Reserve interest rate increases will dent the economy.

Investor unrest is due partly to uncertainty about how the US central bank might navigate the transition under a new leadership team following the replacement of Janet Yellen with new chairman Jerome Powell, said Maris Ogg of Tower Bridge Advisers.

"We are in a different environment and the market is still wrestling with how all that is going to come out," Ogg said. "The market is wrestling with how high rates are going to go and how damaging it is going to be."

Meanwhile, Apple sank 4.1 per cent following a series of reports from Wall Street analysts expressing doubts about iPhone sales. Canaccord Genuity cut its estimate for iPhones and predicted low sales would persist until new products are launched.

Slumping industrial giant General Electric jumped 3.9 per cent despite reporting a US$1.2 billion (S$1.5 billion) first-quarter loss on a large legal charge. Some key divisions posted strong results, and analysts said GE's report avoided fresh negative surprise announcements that have plagued recent results.

Mattel tumbled 3.6 per cent after announcing its fourth new chief executive in four years, with Ynon Kreiz, the former head of Maker Studios, replacing Margo Georgiaidis.

Wells Fargo rose 2 per cent after it agreed to pay US$1 billion to settle to settle with US regulators over alleged deficiencies in its mortgage and auto loan businesses.