While you were sleeping: Apple climbs to record

Wednesday 3rd May 2017

Wall Street was mixed as investors awaited Apple’s latest earnings.

Also, the Federal Open Market Committee began a two-day meeting during which it is not expected to raise interest rates. Investors will eye Wednesday’s post-gathering statement for any clues about the odds of a hike at their June meeting.

"The Fed's outlook is really based on economic fundamentals, and if growth and the labor market trend does not hold up, that could cause the Fed to go slower,’' Gennadiy Goldberg, an interest-rate strategist at TD Securities in New York, told Bloomberg. "If it heats up, that could cause the Fed to roll off the balance sheet earlier."

In 2.35pm trading in New York, the Dow Jones Industrial Average rose 0.1 percent. The Nasdaq Composite Index inched 0.01 percent lower. In 2.20pm trading, the Standard & Poor’s 500 Index added 0.1 percent. Earlier in the day the Nasdaq touched a record high 6,102.72.

The Dow rose, as gains in shares of Intel and those of Visa, recently up 1.4 percent and 1.2 percent respectively, outweighed declines of Procter & Gamble and those of JPMorgan Chase, down 1 percent and 0.8 percent respectively.

Shares of Apple, which reports its latest quarterly earnings after the market close, traded 0.4 percent stronger as of 2.23pm in New York. The stock touched a record high US$148.09 earlier in the day.

And the stock might continue its gains. Active stock fund managers around the world are holding the lowest percentage of Apple shares in their portfolios when compared to the iPhone maker's overall weighting in indexes, Reuters reported, citing a research note by investment bank UBS.

"Active fund managers as a whole continue to underperform their benchmarks and are not going to want to leave a lot of performance on the table if they continue to see this company rally," Todd Rosenbluth, director of ETF and mutual fund research at CFRA, an independent research firm in New York, told Reuters.

While the latest round of US earnings has generally exceeded expectations so far, some disappointed.

Archer Daniels Midland, the US agricultural trader, warned that massive global grain stocks are making it difficult to turn a profit trading grain internationally, Reuters reported.

ADM shares sank, trading 8.4 percent weaker as of 1.19pm in New York.

"We're working very hard in ag services to continue to improve our operations. We have been or facing a couple of years of very strong headwinds into that business," ADM Chief Executive Juan Luciano said on a conference call with analysts, according to Reuters.

"With ample stocks around the world, there is a very subdued environment for us to make profitable international trades," Luciano noted.

Net profit attributable to ADM rose to US$339 million, or 59 cents per share, in the quarter ended March 31, up from US$230 million, or 39 cents a share, in the same quarter a year earlier, the Chicago-based company said in a statement.

Shares of Mosaic also dropped, trading 7.6 percent weaker as of 1.46pm, after the US maker of fertiliser posted quarterly earnings that missed expectations amid lower phosphate and potash prices.

Mosaic swung to a net loss attributable to the company of US$900,000 for the quarter ended March 31, compared with a profit of US$256.8 million, a year earlier, it said in a statement.

Even so, the company is upbeat about the outlook.

“We are seeing positive developments in the phosphates industry following a challenging 2016,” Joc O’Rourke, chief executive officer, said in the statement. “Realised product prices are rising, demand continues to be strong and we believe China is in the process of restructuring its industry.”

"For the remainder of 2017, we expect improved margins in our phosphate business as we begin to realise the benefits of improving market conditions and completed plant maintenance,” he noted.

In Europe the Stoxx 600 Index ended the day with a 0.8 percent gain from the previous close.

Germany’s DAX Index rose 0.6 percent, as did the UK’s FTSE 100 Index, while France’s CAC40 Index added 0.7 percent.

(BusinessDesk)

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