Apple stock rallies on strong iPhone sales

The Dow moved higher on gains in shares of Apple, which recently traded 6.5 per cent higher. Photo / AP
The Dow moved higher on gains in shares of Apple, which recently traded 6.5 per cent higher. Photo / AP

The US dollar rose while Wall Street was mixed, with Apple shares rallying on its better-than-expected sales of its latest iPhone model.

US Federal Reserve policy makers are wrapping up a two-day meeting, and investors will scrutinise their statement for clues on the pace of interest rate rises amid the latest economic data and the rocky start for President Donald Trump.

The Fed is not expected to raise rates this time.

The latest US economic data on factory activity and jobs were better than expected.

The ADP National Employment Report showed US private employers added a higher-than-expected 246,000 jobs in January, up from 151,000 in the previous month. Separately, an Institute for Supply Management report showed its national factory activity index rose to a reading of 56.0 in December, a two-year high.

"The economy is off to the races with the wind at its back," Chris Rupkey, chief economist at MUFG Union Bank in New York, told Reuters. "The Fed will lift rates three times in 2017 for sure, and maybe they might need to add a rate hike or start the year earlier with a policy firming in March."

Wall Street was mixed. In 1.11pm trading in New York, the Dow Jones Industrial Average added 0.2 per cent, while the Nasdaq Composite Index rose 0.4 per cent. In 12.56pm trading, the Standard & Poor's 500 Index inched 0.1 per cent lower.

"We're in a very stable market with a lot of cross-currents. Fourth-quarter earnings seem to be okay," Chuck Self, chief investment officer at iSectors in Appleton, Wisconsin, told Reuters. "However, political uncertainty is making it hard for investors to have conviction in the market."

The Dow moved higher on gains in shares of Apple, which recently traded 6.5 per cent higher. Meanwhile shares United Technologies and those of Exxon Mobil posted the largest percentage declines in the Dow, recently down 1.4 per cent and 1.3 per cent respectively.

Apple posted quarterly revenue that beat expectations, reporting that sales rose 3.3 per cent to US$78.4 billion in the last three months of 2016.

"We were surprised by the strength of iPhone 7 Plus where we were actually short of supply throughout the quarter," Chief Financial Officer Luca Maestri told Bloomberg. "We've been able to come into supply-demand balance in January."

In Europe, the Stoxx 600 Index finished the day with a 0.6 per cent gain from the previous close, bolstered by earnings from Volvo and Siemens.

The UK's FTSE 100 Index added 0.1 per cent, France's CAC 40 Index climbed 1 per cent and Germany's DAX Index increased 1.1 per cent.

- BusinessDesk

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