Wall Street yesterday struggled to defend territory above 22,000 on the Dow as an early Apple-led surge threatened to fizzle out and European stocks drifted back into the red.
At the opening bell, the Dow blue-chip index rose above the key 22,000 level for the first time after Apple reported better revenues and profits for the past quarter, reaching a high of 22,036.10.
“US stocks are higher in early action, with the tech sector getting a boost from the better-than-expected earnings results from Dow member Apple,” said analysts at the Charles Schwab brokerage.
But the surge didn’t last as profit-taking eroded most of the early gains.
Meanwhile Apple shares, which had jumped by 6% at the opening bell, were still just under 5% higher approaching midday in New York.
While the current earnings season has provided markets with much cheer, political and geopolitical uncertainties weighed on sentiment, as did weaker-than-expected US private sector jobs data from payroll firm ADP.
European stock markets came off morning lows as early Wall Street enthusiasm rubbed off, but slipped again towards the close as New York shares came off their highs.
A strengthening euro and trouble in the banking sector gave Europe pause for thought.
In Paris, shares in French lender Societe Generale slid after revealing that second-quarter net profits tumbled on the cost of settling a lawsuit with Libya’s sovereign wealth fund.
In London, shares in emerging markets lender Standard Chartered dropped on news that it was not resuming payment of its shareholder dividend. The FTSE 100 was down 0.2% at 7,411.43 points whereas Frankfurt’s DAX 30 lost 0.6% at 12,181.48 and in Paris the CAC 40 was down 0.4% at 5,107.25 at close yesterday.
And German peer Commerzbank lost ground in Frankfurt after logging a second-quarter loss on restructuring costs.
Many traders said they were treading cautiously before important events later this week, and cashed in gains won on Tuesday’s strong eurozone economic growth data.
The Bank of England will announce its latest interest rate decision today. A day later, the United States will publish its key healthcheck on the state of the world’s biggest economy.
“Overall sentiment remains neutral with many traders preferring to stay on the sidelines for now until at least the BoE tomorrow or even until tomorrow’s US non-farm payrolls data,” said Markus Huber, analyst at trading firm City of London markets.
Shares in Societe Generale slid yesterday after revealing that its second-quarter net profits tumbled on the cost of settling a lawsuit with Libya’s sovereign wealth fund.
