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Apple's stock surge takes Dow beyond 22,000

Published 08/02/2017, 09:46 AM
© Reuters. Traders work on the floor of the NYSE in New York
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By Tanya Agrawal

(Reuters) - The Dow Industrials breached the 22,000 mark for the first time ever on Wednesday, boosted by a rally in Apple's shares.

Apple (O:AAPL) jumped 6.02 percent to a record high, after the world's largest publicly listed company reported strong results and iPhone sales, and signaled its upcoming 10th-anniversary phone is on schedule. The stock is up about 30 percent this year.

The S&P 500 information technology index (SPLRCT) is up 22 percent year to date, leading other sectors, as investors look for growth in an otherwise low-growth environment. It was the only S&P gainer with a 1 percent rise.

The Dow has risen 11 percent in 2017, even as Wall Street is losing confidence that President Donald Trump and a Republican-controlled Congress would be able to cut taxes and increase infrastructure spending this year.

The Dow hit the 20,000 mark in late January and crossed the 21,000 mark in just over a month on March 1, helped by a rise in banks Goldman Sachs (N:GS) and JPMorgan (N:JPM).

"Investors are completely immune to all the drama which is taking place in Washington because if you look at the performance of the Dow, it appears everything is hunky-dory," said Naeem Aslam, chief market analyst at Think Markets UK.

"In earnings, it is all about Apple. The big news was about the production of iPhone 8, the flagship product for the firm will hit the market on time with no issues around production."

Two-thirds of S&P 500 companies have reported their second-quarter earnings so far and 72 percent of them have beaten Wall Street's expectations, according to Thomson Reuters I/B/E/S. In a typical quarter, 64 percent of the companies beat expectations.

The results may reassure investors worried about high valuations. The S&P 500 is trading at about 18 times earnings estimates for the next 12 months, above its 10-year average of 14 times, according to Thomson Reuters Datastream.

At 9:35 a.m. ET (1335 GMT), the Dow Jones Industrial Average (DJI) was up 47.63 points, or 0.22 percent, at 22,011.55, the S&P 500 (SPX) was up 1.83 points, or 0.07 percent, at 2,478.18.

The Nasdaq Composite (IXIC) was up 29.02 points, or 0.46 percent, at 6,391.96.

10 of the 11 major S&P 500 sectors were lower, with the energy index's (SNY) 0.81 percent loss leading the decliners.

Data showed U.S. private employers added 178,000 jobs in July, after adding 191,000 jobs in June. Economists polled by Reuters expected an addition of 185,000 jobs. The data comes ahead of the more comprehensive non-farm payrolls data on Friday.

Garmin (O:GRMN) rose 3.84 percent and FireEye (O:FEYE) 7.83 percent after both companies reported strong quarterly results.

Humana (N:HUM) rose 3.53 percent as the health insurer reported a better-than-expected quarterly profit.

© Reuters. Traders work on the floor of the NYSE in New York

Declining issues outnumbered advancers on the NYSE by 1,403 to 999. On the Nasdaq, 1,149 issues fell and 1,026 advanced.

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