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While you were sleeping: UPDATED Apple and tech stocks weigh on Wall St

Dow falls 46 points as Apple shares drop 2.6% in wake of iPhone7 release.

Margreet Dietz
Fri, 09 Sep 2016

Wall Street moved lower as slides in Apple and other tech shares outweighed a gain in energy stocks.

The latest US claims data pointed to signs of strength in the labour market, hot on the heels of disappointing economic data that have cooled expectations for a Federal Reserve interest rate hike this month.

A Labour Department report showed that initial claims for state unemployment benefits unexpectedly fell, declining 4000 to a seasonally adjusted 259,000 for the week ended September 3.

The Federal Open Market Committee begins its next two-day meeting on September 20. While bets on whether the Fed will lift rates this month have fluctuated, a September increase would catch most investors offside.

Dow falls 46 points
The Dow Jones Industrial Average closed 46.23 points lower, or 0.25%, to 18,479.91, while the Nasdaq Composite Index dropped 0.5% to 5259.48. The Standard & Poor's 500 Index declined 0.2% to 2181.30.

"Against the backdrop of some disappointing data over the past month or two and the uncertainty of the election, uncertainty regarding the Fed ... we're positioned rather defensively trying to preserve capital until we get some visibility," Phil Orlando, chief equity market strategist, at Federated Investors in New York, told Reuters.

The Dow fell as slides in shares of Apple slid 2.6% in the wake of the iPhone 7 release. Hewlett Packard Enterprise lost 3.2% after it said it planned to spin off and merge most of its software operations with Micro Focus International. Shares of Britain’s Micro Focus rose 15% in London.

Energy stocks rose with the price of oil after Energy Information Administration data showed the biggest drop in US crude inventories in 17 years. Crude had its biggest one-day gain since April 8. Prices settled 4.7% higher at $US47.62 a barrel. 

Even so, shares of Tractor Supply, which bills itself as the largest rural lifestyle retail store chain in the US, plunged 17% after the company downgraded its fiscal 2016 earnings estimates because of a drop in sales in oil-producing regions.

"While the retail environment has become more challenging over several months, the most pronounced decreases in our traffic and sales are in energy and agricultural communities," Tractor Supply chief executive Greg Sandfort says.

"With our customers generally being fiscally conservative, we believe many of them have responded to the economic uncertainty by reducing their purchasing patterns in some of our key geographic regions." 

ECB holds rates
In Europe, the Stoxx 600 Index ended the session with a decline of 0.3% from the previous close after the European Central Bank failed to offer an extension of its quantitative easing programme and kept its key interest rate on hold.

France's CAC 40 index decreased 0.3%, while Germany's DAX index dropped 0.7%.

ECB President Mario Draghi said policy makers had not discussed prolonging the QE programme.

"Mr Draghi doesn't sound like a central banker who's in any hurry to ease further," Tim Graf, head of European macro strategy at State Street in London, told Bloomberg.

His stance "fits in with the G-20 statements about using all actors to support growth, including the fiscal side. Taking ever-easier monetary policy for granted is becoming less valid," Mr Graf said.

The UK's FTSE 100 Index rose 0.2%.

(BusinessDesk)

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Margreet Dietz
Fri, 09 Sep 2016
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While you were sleeping: UPDATED Apple and tech stocks weigh on Wall St
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