Dow erases 200-point gain as Apple falls
The Dow Jones Industrial Average closed Wednesday’s session just below the flatline, erasing a 200-point jump, as shares of Apple failed to hold on to strong gains from earlier in the day.
The 30-stock index ended the day down just 0.95 points at 24,464.69 as it lost steam heading into the close. At its high of the day, it was up 204.15 points. Apple also gave up a 2.1 percent gain toward the end of the day to close just 0.1 percent lower.
“The behavior of Apple raises doubts that the thanksgiving bounce attempt has any validity,” said Scott Redler, partner with T3live.com. “Traders on Friday will be watching Tuesday’s low of $175.50. If that doesn’t hold, it could be a headwind for the market and tech.”
To be sure, Wednesday’s moves came on a day with very low trading volume as most of Wall Street was away for the Thanksgiving holiday. The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, traded just over 71 million shares, well below its 30-day average volume of 130.3 million.
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Pedestrians walk past the New York Stock Exchange.
The S&P 500 and Nasdaq Composite, meanwhile, rose 0.3 percent and 0.9 percent respectively as other tech shares like Facebook, Amazon and Alphabet all climbed more than 1 percent. The broad S&P 500 ended the day at 2,649.93 and the Nasdaq closed at 6,972.25.
These tech shares, which are part of the popular “FAANG” trade, have been under pressure recently. Through Tuesday’s close, they were all down more than 20 percent from their 52-week highs, officially in a bear market. The sharp decline in tech helped send the Dow, S&P 500 and Nasdaq all down at least 3 percent for the week.
“Tech stocks have featured prominently in recent equity weakness,” Mark Haefele, a strategist at UBS Global Wealth Management Chief Investment Office, said in a note. “But we think it’s important to discriminate within tech. The weakness is being driven by slower growth in the consumer IT sector, but the outlook for the enterprise IT sector, which makes up the majority of global tech, is more robust.”
European equities also rose on Wednesday. The Stoxx 600 index, which tracks a broad swath of European shares, rose 1.1 percent. France’s CAC 40 gained 1 percent while the German Dax climbed 1.6 percent.
U.S. stocks sold off for a second consecutive session on Tuesday, as energy shares dropped with oil prices, while retailers including Target and Kohl tumbled after weaker-than-expected earnings.
Tuesday’s declines sent the Dow and S&P 500 to their weakest levels since late October, while the tech-heavy Nasdaq dropped to its lowest level in more than seven months.
“I think we’re due for a bounce here,” said Tom Essaye, founder of The Sevens Report. “Market sentiment has been pretty negative lately. The major news aggregators are taking notice. That’s usually a sign that we’re due for a bounce.”
Essaye also said pressure is building on the Federal Reserve to slow down its pace for hiking interest rates. “They will still hike in December, but i think 2019 is really up for grabs.”
Foot Locker shares surged 14.9 percent after the company reported better-than-expected earnings on Tuesday. Its same-store sales, a key metric for retailers, also topped analyst expectations. Other retailers like L Brands and Office Depot also rose ahead of Black Friday, one of the busiest shopping days of the year in the U.S.
In economic data, durable goods orders fell 4.4 percent in October, more than expected. It also marked the third decline in the past four months. Meanwhile, weekly jobless claims rose to a more than four-month high last week.
contributed to this report.