Top-tier US stocks ended Tuesday firm, after recovering from earlier losses on expectations of positive after hours news from Apple (NASDAQ:AAPL) as well as buoyant housing data.
The market bellwether S&P 500 index was up 0.03% at 2,169, having spent most of the session in negative territory.
Sales of newly-built US homes rose more than Wall Street expected last month to the highest rate since 2008 in the latest sign that the economy is growing – feeding into this week’s expectations that the Federal Reserve may hike rates before year end. The Fed concludes a two-day rate-setting meeting on Wednesday at which it is expected to leave rates unchanged but could intensify its language about a forthcoming hike.
Apple did not disappoint investors, although Twitter (NYSE:TWTR) did.
Apple said that customer demand for the iPhone was getting stronger and that the decline in sales of its flagship device has passed the “low point”, as it reported third quarter results broadly in line with Wall Street expectations.
Apple sold 40.3m iPhones in the three months to June, down 15% on the previous year but on the higher end of analysts’ forecasts. Overall revenues fell 15% to $42.4bn, with net income down 13% to $36.7bn. Sales in China were the worst hit, down 33% year-on-year.
The company added it was able to clear more iPhone inventory that it had anticipated.
Apple shares traded 6.1% higher at $102.60 after hours.
Meanwhile, Twitter shares were sharply lower in after-hours trading on Tuesday after the microblogging social media platform group’s sales outlook for the current quarter missed analysts’ expectations.
Twitter reported a slight pickup in users after a recent period of plateau, but this was overshadowed by the California-based company saying it expects sales in the range of $590mln to $610mln in the third quarter, below analysts’ estimates for $681.4mln.
Its outlook for earnings before interest taxes, depreciation and amortisation (EBITDA) in the range of $135mln to $150mln was also below Street forecasts for $168.8mln.
Twitter shares were down 9.7% at $16.66 after hours on Tuesday.
The S&P Midcap 400 index was up 0.5% at 1,554 while the S&P Smallcap 600 advanced by 0.55% to 743.
Open
Wall Street shares opened mixed but the S&P500 higher, boosted by tech stocks.
The S&P 500 rose 0.10% to 2,170, while Nasdaq added 0.32% to 5,114.
The Dow Jones headed lower however to 18,488, down 0.03%.
Investor focus has turned to a two day policy meet from the Fed, the US Central Bank, where an announcement on interest rates is keenly awaited.
There is much chatter but the general mood is Janet Yellen will not raise rates in the light of aglobal economic worries andp after the UK's Brexit vote, and the uncertainty that brings.
It comes after earlier this year, it looked like there would be a rise before the year was out.
One of the biggest stories came from burger titan McDonald's (NYSE:MCD), whose shares tumbled over 4% to US$122.21 as latest results disappointed the market and underlined that a US turnaround is a way off.
The global group reported a profit of US$1.09 billion in the three months to June 30 compared to $1.2 billion in the same period a year earlier.
Revenue fell 4% to US$6.27bn, which met analysts’ expectations.
It's Fed and earnings city today in the US and shares are seen opening a tad lower as traders are not sure what which way to turn.
It comes as in London, FTSE100 benchmark is up just around 14 points at 6,723.
Investors across the Pond are sitting on the fence as they look towards an interest rate decision from the Fed on Wednesday. The two-day meeting starts today.
It will be the first meeting in the US since the UK voted to leave the European Union on June 23 - the so-called 'Brexit', which has sent analysts and commentators into a spin, as to the implications for global and European finances.
Commentators expect the US Central Bank to keep rates on 'hold'.
On the macro front, the consumer confidence index for July is due later and a report on new home sales.
Yesterday, Wall Street shares closed lower, weighed down by jitters over a busy event-driven week as well as weaker oil prices.
The S&P 500 index ended down 0.3%, or 6.55 at 2,168. The tech heavy Nasdaq lost 2.4 to go to 5,097 and the Dow Jones shed over 77 points at 18,493.
In futures today, the Dow is down six; the S&P500 is two down and the Nasdaq is 0.25 points lower.
A stack of firms are due to post quarterlies before the opening bell, including in-focus coms giant Verizon (NYSE:VZ) after the Yahoo deal, and fast food chain McDonald's (NYSE: MCD).
After markets close, investors will hear from behemoth Apple (NASGAQ:AAPL) and social media giant Twitter (NYSE: TWTR).