Home | Breaking News | US stocks skid as Apple pulls tech companies lower
Specialists John O'Hara, foreground, and Frank Masiello work on the floor of the New York Stock Exchange, Thursday, April 28, 2016. Stocks are opening broadly lower on Wall Street as traders look over the latest batch of earnings and deal news. (AP Photo/Richard Drew)
Specialists John O'Hara, foreground, and Frank Masiello work on the floor of the New York Stock Exchange, Thursday, April 28, 2016. Stocks are opening broadly lower on Wall Street as traders look over the latest batch of earnings and deal news. (AP Photo/Richard Drew)

US stocks skid as Apple pulls tech companies lower

WT24 Desk

NEW YORK — U.S. stocks took their biggest loss in three weeks on Thursday after a late sell-off. Apple, which is mired in a slump, fell to its lowest price in about two months and dragged the tech sector sharply lower, AP reports.

Tech stocks, which rose early on thanks to earnings gains from Facebook and PayPal, slumped after billionaire investor Carl Icahn disclosed that he’d sold his stake in Apple. Icahn wasn’t a major shareholder in the tech giant, but his moves are closely watched by many investors.

The Dow Jones industrial average lost 210.79 points, or 1.2 percent, to 17,830.76. The Standard & Poor’s 500 index fell 19.34 points, or 0.9 percent, to 2,075.81. The Nasdaq composite closed lower for the sixth day in a row, losing 57.85 points, or 1.2 percent, to 4,805.29. That index has struggled in part because Apple, the most valuable public company in the world, has fallen 15 percent in two weeks.

Earlier in the day, indexes had wavered between small gains and losses. Investors were surprised the Bank of Japan decided not to take further action to stimulate that nation’s economy, and the yen continued to get stronger against the dollar.

“All they did was delay the inevitable,” said Scott Wren, global equity strategist for Wells Fargo’s Investment Institute. “All these global central banks, they’re going to come out guns blazing” to stimulate their economies.

Meanwhile a handful of stocks moved on deal news. Most of those were in health care. In the largest, medical device maker Abbott Laboratories said it will buy St. Jude Medical, combining Abbott’s heart devices, heart valve products and infant formula business with St. Jude’s heart failure and heart rhythm device products.

St. Jude rocketed $15.84, or 25.6 percent, to $77.79 while Abbott fell $3.41, or 7.8 percent, to $40.42. “Companies are on the hunt for ways to increase their profitability,” said Wren, of Wells Fargo. “One way to do that is to buy somebody else.”

That task is made easier, he added, by low interest rates on loans and the fact that companies have been slashing their expenses for years.

French drugmaker Sanofi went public with an offer to buy cancer drug maker Medivation for $9.3 billion, or $52.50 per share. Medivation, the maker of the prostate cancer medication Xtandi, added $4.12, or 7.9 percent, to $56.17.

Drugmaker AbbVie said it will buy privately-held Stemcentrx for $5.8 billion. Stemcentrx is developing a drug that uses stem cells to treat small cell lung cancer. AbbVie stock rose 50 cents to $61.20.

Comcast’s NBCUniversal unit will buy DreamWorks Animation, the movie studio behind the “Kung Fu Panda” and “How to Train Your Dragon” franchises, for $3.55 billion. The deal values DreamWorks at $41 a share, and the stock, which jumped 19 percent Wednesday in anticipation of the deal, rose another $7.75, or 24.1 percent, to $39.96.

Hanesbrands, a maker of underwear, t-shirts and socks, said it will buy the biggest maker of underwear in Australia. The company said its offer values Pacific Brands Ltd. at $800 million. Hanesbrands has also made a series of deals to give it more control of the Champion brand overseas. The stock jumped $1.74, or 6.3 percent, to $29.53.

Apple fell $2.99, or 3.1 percent, to $94.83 after Icahn’s announcement to CNBC. Apple sank 6 percent Wednesday after reporting its first revenue decline in over a decade as iPhone sales fell. Apple’s loss canceled out a gain for Facebook, which reached an all-time high. The social network’s first-quarter profit nearly tripled, while its revenue was also better than expected. The stock climbed $7.84, or 7.2 percent, to $116.73.

The U.S. economy grew a bit less than expected in the first quarter. The government said gross domestic product increased just 0.5 percent as consumer spending slowed down, exports kept falling, and business investment plunged. That’s the weakest result in two years, but experts think the economy will bounce back in the current quarter. It’s followed that pattern over the last few years.

Bond prices continued to rise after a big gain on Wednesday. The yield on the 10-year U.S. Treasury note fell to 1.83 percent from 1.85 percent.

Consumer stocks also struggled. Harman International, which makes automotive electronics and audio equipment, reported first-quarter results that didn’t meet analysts’ projections. The company also cut its forecasts for the rest of the year. Harman said revenue from a unit that serves restaurants, sports arenas and other businesses fell. Its stock dropped $11.83, or 13.3 percent, to $77.07.

European stock indexes were mixed. Germany’s DAX was 0.2 percent higher while the CAC 40 in France and the FTSE 100 index in Britain were little changed. Asian stocks mostly fell after the Bank of Japan’s decision.

The Nikkei 225, Japan’s main stock index, tumbled 3.6 percent. The dollar sank to 108.09 yen from 111.34 yen. Meanwhile the euro rose to $1.1351 from $1.1323.

Benchmark U.S. crude oil, which is at its highest prices in almost six months, rose 70 cents, or 1.5 percent, to $46.03 a barrel in New York. Brent crude, the international standard, picked up 96 cents, or 2 percent, to $48.14 a barrel in London.

In other energy trading, wholesale gasoline rose 2 cents to $1.60 a gallon. Heating oil rose 3 cents to $1.41 a gallon. Natural gas fell 4 cents to $2 per 1,000 cubic feet.

Gold gained $16, or 1.3 percent, to $1,266.40 an ounce. Silver jumped 26 cents, or 1.5 percent, to $17.55 an ounce. Copper rose 1 cent to $2.22 a pound.

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