An historic milestone for Apple (AAPL) contributed to a substantial advance by the tech-heavy Nasdaq during trading on Thursday, while renewed trade war concerns weighed on some of the other Dow components.
The major averages subsequently ended the day mixed. While the Dow edged down 7.66 points or less than a tenth of a percent to 25,326.16, the Nasdaq jumped 95.40 points or 1.2 percent to 7,802.69 and the S&P 500 climbed 13.86 points or 0.5 percent to 2,827.22.
The rally by the Nasdaq came amid a continued advance by shares of Apple, which surged up by 2.9 percent to a new record closing high after soaring by 5.9 percent on Wednesday.
With the jump, Apple became the first U.S. company to reach a $1 trillion market capitalization as traders continued to react positively to its upbeat fiscal third quarter results and guidance.
On the other hand, trade concerns weighed on some of the other Dow components after President Donald Trump’s administration confirmed reports it is considering raising the rate of tariffs on Chinese imports.
U.S. Trade Representative Robert Lighthizer said Trump has directed him to consider increasing the proposed tariff rate on $200 billion worth of Chinese goods to 25 percent from the previously announced 10 percent.
“The Trump Administration continues to urge China to stop its unfair practices, open its market, and engage in true market competition,” Lighthizer said. “We have been very clear about the specific changes China should undertake.”
He added, “Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses.”
In response, China reiterated its threat to retaliate, with the Chinese Ministry of Commerce declaring the communist country fully prepared to defend its dignity and the interests of its people.
Meanwhile, traders were also looking ahead to the release of the Labor Department’s closely watched monthly jobs report on Friday.
Employment is expected to increase by 190,000 jobs in July, while the unemployment rate is expected to edge down to 3.9 percent.
A day ahead of the release of the monthly report, the Labor Department released a report showing a modest increase in initial jobless claims in the week ended July 28th.
The report said initial jobless claims inched up to 218,000, an uptick of 1,000 from the previous week’s unrevised level of 217,000. Economists had expected jobless claims to rise to 220,000.
A separate report from the Commerce Department showed factory orders climbed by 0.7 percent in June, matching economist estimates.
Biotechnology stocks showed a significant move to the upside over the course of the session, driving the NYSE Arca Biotechnology Index up by 1.5 percent.
Regeneron Pharmaceuticals (REGN) posted a standout gain after the biotech company reported second quarter results that exceeded analyst estimates on both the top and bottom lines.
Considerable strength also emerged among retail stocks, as reflected by the 1.4 percent gain posted by the Dow Jones Retail Index.
Tobacco, computer hardware, and telecom stocks also moved notably higher, while steel stocks moved sharply lower amid concerns about the impact of the trade dispute between the U.S. and China.
Within the steel sector, U.S. Steel (X) posted a particularly steep loss despite reporting better than expected second quarter results.
In overseas trading, stock markets across the Asia-Pacific region moved significantly lower during trading on Thursday. Japan’s Nikkei 225 Index slumped by 1 percent, while Hong Kong’s Hang Seng Index plunged by 2.2 percent.
The major European markets also moved to the downside on the day. While the German DAX Index sunk by 1.5 percent, the U.K.’s FTSE 100 Index tumbled by 1 percent and the French CAC 40 Index fell by 0.7 percent.
In the bond market, treasuries saw modest strength following the drop seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.7 basis points to 2.986 percent.
The Labor Department’s monthly jobs report is likely to be in focus on Friday, overshadowing separate reports on the U.S. trade deficit and service sector activity.
On the earnings front, Activision Blizzard (ATVI), CBS Corp. (CBS), GoPro (GPRO), Shake Shack (SHAK), and Western Union (WU) are among the companies releasing their quarterly results after the close of today’s trading.
DISH Network (DISH), Groupon (GRPN), and Kraft Heinz (KHC) are also among the companies due to release their results before the start of trading on Friday.
by RTTNews Staff Writer
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