While you were sleeping: Downgrade for Apple while Alphabet tops $US1000

Wall Street eased from record highs, as a decline in shares of Apple weighed on sentiment and tourism stocks slumped. However, Google parent Alphabet class A shares closed above $U1000 for the first time, rivalling Friday's achievement by Amazon.com.

At the close trading in New York, the Dow Jones Industrial Average slipped 22.25 points, or 0.1%, to 21,184.04. The Nasdaq Composite Index eased 0.16% to 6295.68 and the Standard & Poor's 500 Index was down 0.12% to 2436.10..

Earlier in the day the Nasdaq had touched a record-high 6310.62 as Alphabet touched $US1,007.40 minutes after the opening bell, an all-time high.

Alphabet closed at $US1003.88, up 0.8%. The tech surge had led to a race to $1,000 between Alphabet and Amazon, whose shares closed at $1011.34. Amazon isn’t technically a part of the tech sector, but is often discussed alongside it.

Apple downgraded
The Dow slid as declines in shares of Cisco and those of Apple, each 1.1% weaker respectively, outweighed gains in shares of Exxon Mobil and those of Microsoft, up 1.0% and 0.9% respectively.

Shares of Apple fell as Pacific Crest analyst Andy Hargreaves downgraded the stock to "sector weight" from "overweight."

"We believe AAPL anticipates strong performance in the iPhone 8 cycle, while providing relatively little weight to risks through the cycle or the potential for iPhone sales to decline in FY19," Hargreaves wrote in a note to investors Sunday, CNBC reported.

He cited risks "around gross margins, elasticity, supply issues, or the likelihood for declines beyond the iPhone 8 cycle."

Tourism shares fell, with Royal Caribbean Cruises losing 1.2% and Wynn Resorts 1%. Host Hotels & Resorts lost 1.7%. 

Mixed economic news
The latest US economic data, while mixed, further underpinned already-firm bets that the Federal Reserve will announce an interest rate increase at the end of its two-day meeting next week.

An Institute for Supply Management report showed its non-manufacturing activity index declined to a lower-than-expected reading of 56.9 in May, down from 57.5 in April.

"The economy is neither accelerating nor slowing, but the labour market is looking up," Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told Reuters.

Meanwhile, shares of Herbalife sank 8.2% after the company downgraded its sales outlook, predicting second-quarter revenue will fall more than previously expected.

Hedge-fund manager Bill Ackman was unimpressed.

"On May 4th Herbalife raised guidance driving the stock to new highs. Insiders including [CEO Michael] Johnson sold their stock and options," Ackman said in a statement, CNBC reported.

"Fewer than three weeks after the stock sales, the company is now lowering guidance, somehow claiming that it is surprised by reduced volumes the first month the [US Federal Trade Commission] settlement takes effect."

In Europe, the Stoxx 600 Index finished the session with a 0.1% decline from the previous close. The UK's FTSE 100 Index slid 0.3%, while France's CAC40 Index shed 0.7%.

Travel stocks fall
The Stoxx 600’s travel and leisure subindex fell 0.8% following the London Islamic terrorist attack at the weekend. Shares in EasyJet dropped 3.2% in London trading, while British Airways parent company International Consolidated Airlines Group fell 2.6%.

Several European financial markets were closed for national public holidays including Germany and Switzerland.

Oil resumed its decline, following earlier gains as investors assessed the impact of a Middle East rift between Qatar and Saudi Arabia, backed by other Arab powers such as Egypt. Investors remained concerned about the global glut.

"The market has again turned its focus to worries that excess supplies are going to continue to keep the glut in place," Gene McGillian, market research manager at Tradition Energy in Stamford, Connecticut, told Bloomberg.

The Qatar stock market shed 7.3% to its lowest close since January.

US crude oil fell 0.5% to $US47.40 a barrel

(BusinessDesk)