Apple drags Wall Street into the red
US stocks fell yesterday for the third session in four, with market direction largely dictated by the swings in shares of Apple, the largest company in the world.
The S&P 500 appeared set for a strong move off a nine-month high as Apple shares gained three per cent in early trading, helped by Tuesday’s disclosures that prominent hedge-fund managers had been buying the stock.
But Apple, the largest company by market capitalisation, turned negative around midday and closed down 2.3 per cent to $497.67, quickly reversing the Nasdaq index’s advance. The stock had climbed as high as $526.29 during the session.
The fortunes of both S&P and Nasdaq have been closely tethered to Apple of late, with the benchmark S&P index and Nasdaq a near-perfect correlation over the last 50 days, showing they are moving almost in lockstep.
The S&P hit a peak of 1,355.87, just shy of its July 2011 high. A break above that level would take the benchmark to its strongest since at least May of last year.
“You are looking at good old exhaustion inside of the market,” said Keith Bliss, senior vice president at Cuttone & Co. “From a technical standpoint, we had strong resistance at 1350, 1355 in the market, and there was no real appetite to get through it.”
The Dow Jones industrial average dropped 97.33 points, or 0.76 per cent, to 12,780.95. The Standard & Poor’s 500 Index lost 7.27 points, or 0.54 per cent, to 1,343.23. The Nasdaq Composite Index fell 16 points, or 0.55 per cent, to 2,915.83.
Industrial stocks led declines on the S&P 500, with Deere & Co off 5.4 per cent at $84.28 after investors expected the farm equipment company to give a stronger full-year forecast.
US manufacturing output rose solidly in January and a gauge of factory activity in New York state hit a one and a half year high in February, adding to a run of fairly upbeat data, even though overall industrial production was flat last month.
Decliners on the Dow, which underperformed the broader market, included industrial and material stocks like Caterpillar, down 1.7 per cent at $112.53.
Volume was solid with about 7.38bn shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the daily average of 6.98bn.
Declining stocks outnumbered advancing ones on the NYSE by 1,723 to 1,273.