Apple shares sour Wall St mood

Trader Edward McCarthy, left, works on the floor of the New York Stock Exchange. File photo / AP
Trader Edward McCarthy, left, works on the floor of the New York Stock Exchange. File photo / AP

An overnight slide in shares of Apple erased most early gains on Wall Street, offsetting further evidence of accelerating US economic growth and talk that Russia and Ukraine were edging closer to a cease-fire in eastern Ukraine.

US economic activity has grown in recent weeks, according to the US Federal Reserve in its latest Beige Book. The Fed's next two-day policy meeting starts September 16.

"Reports from the twelve Federal Reserve Districts indicated that economic activity has expanded since the previous Beige Book report [released on July 16]; however, none of the Districts pointed to a distinct shift in the overall pace of growth," according to the Beige Book.

In afternoon trading in New York, the Dow Jones Industrial Average rose 0.13 per cent. The Standard & Poor's 500 Index inched 0.02 per cent lower, while the Nasdaq Composite Index fell 0.44 per cent. Earlier the S&P 500 reached a record high 2,009.28.

The Dow advanced on gains in shares of Merck and Exxon Mobil, up 1.5 per cent and 0.8 per cent respectively.

Shares of Apple dropped, last down 3.8 per cent at US$99.35 after earlier falling as low as US$98.58, and weighing on the Nasdaq.

"Apple stock's had a pretty strong move in the last several months," Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities, told Blooomberg News. "A lot of positives from the iPhone launch are built into the stock price at these levels. People are merely taking profits."

One trigger for selling this week though was concern that Apple's vaunted security blanket might not be as tight as advertised with the theft of a slew of nude photos of celebrities from Apple accounts.

In Europe, the Stoxx 600 finished the session with a 0.7 per cent climb from the previous close, as did the UK's FTSE 100 Index. France's CAC 40 rose 1 per cent, while Germany's DAX added 1.3 per cent.

Euro-zone output expanded for the fourteenth straight month in August, according to the latest PMI surveys from Markit. European Central Bank policy makers are set to meet on Thursday.

Even so, the final Markit Eurozone PMI composite output index eased to 52.5 in August, from July's three-month high of 53.8, the weakest rate of growth in 2014.

"The eurozone economy is defying expectations of gaining momentum, which will no doubt add to calls for the ECB to embark on full-scale quantitative easing," Chris Williamson, chief economist at Markit, said in a statement.

"The PMI suggests the eurozone's economy is likely to have seen renewed growth in the third quarter but, instead of accelerating in line with ECB expectations after the June stimulus announcements, the pace of growth is down to the weakest seen so far this year," Williamson said. "Tensions in Ukraine are clearly having an impact on confidence, subduing business spending and investment."

- BusinessDesk

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