Dollar edges up ahead of Fed decision; Fall in Iphone, U.S. car sales knock global stocks
World stock markets fell on Wednesday as declines in iPhone sales brought about some concern about consumer strength, while the dollar edged higher before a U.S. central bank statement that may hint towards a rate hike next month.
Apple Inc (AAPL.O) lost 0.9 percent as the biggest drag on the S&P 500 after it reported a surprise fall in iPhone sales in its fiscal second quarter on Tuesday. The drop came on the heels of a decline in sales for U.S. automakers for April and a soft first-quarter reading on U.S. growth last week.
Even with the decline, Apple still managed to top earnings estimates in what has been a strong quarter for U.S. companies. Thomson Reuters data shows first-quarter growth is currently expected to be 14.2 percent, the best quarter since 2011, with 357 of S&P 500 companies having reported.
“Think about the mixed message you had in the first quarter – GDP light, monthly auto sales light, iPhone sales light, so you’ve got extraneous negative data,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
“The first quarter is a blockbuster quarter for earnings on balance, which doesn’t necessarily line up with some of the incremental pieces of economic data that we’ve seen. That is the hard part to rationalize.”
A report by payrolls processor ADP said private employers expanded their payrolls by 177,000 jobs last month, the smallest gain since the 62,000 increase last October as they faced increasing difficulty finding qualified workers.
Other data indicated the pace of growth in the U.S. economy’s service sector increased in April, led by a jump in new orders, according to an industry report.
The Dow Jones Industrial Average .DJI fell 34.45 points, or 0.16 percent, to 20,915.44, the S&P 500 .SPX lost 7.26 points, or 0.30 percent, to 2,383.91 and the Nasdaq Composite .IXIC dropped 30.67 points, or 0.5 percent, to 6,064.70.
