U.S. stocks dip as health care firms fall; Apple climbs

Marley Jay, The Associated Press</span>
Published Wednesday, May 2, 2018 7:08AM EDT
Last Updated Wednesday, May 2, 2018 10:44AM EDT

NEW YORK -- Apple is climbing Wednesday after it announced a huge stock repurchase and solid results in its latest quarter, but U.S. stocks are mostly lower as health care firms fall. Hepatitis C drugmaker Gilead Sciences and animal health company Zoetis both stumbled. Snap, the company behind the Snapchat video app, is plunging after it reported weak revenue. Bond yields are little changed as investors expect the Federal Reserve to hold interest rates steady as it wraps up its latest meeting this afternoon.

KEEPING SCORE: The S&P 500 index lost 6 points, or 0.3 per cent, to 2,648 as of 9:50 a.m. Eastern time. That came after a late rally Tuesday. The Dow Jones industrial average dipped 44 points, or 0.2 per cent, to 24,054. The Nasdaq composite rose 1 point to 7,132. The Russell 2000 index of smaller-company stocks was unchanged at 1,549.

APPLE PAY(S OFF): Apple had a slightly better fiscal second quarter than Wall Street expected, and the tech giant said it will use some of its tax savings to buy back $100 billion of its own stock and to raise its dividend. While iPhone sales weren't any better than expected in the latest quarter, shareholders were pleased with Apple's forecasts and with the amount of cash the company is returning to them.

Apple stock climbed 3.5 per cent to $175.05.

HEALTH WOES: Drugmaker Gilead Sciences dropped 7.7 per cent to $66.94 after its sales fell short of analyst estimates. Revenue from two of Gilead's major hepatitis C drugs dropped as new competitors entered the market. Animal health company Zoetis also disappointed Wall Street and fell 4.8 per cent to $79.39.

SNAPPED: Snap skidded 21.7 per cent to $11.07 after its first-quarter revenue fell far short of estimates. The company said its redesign, which has been slammed by some users, was one of the reasons for the slip.

FED FOCUS: The Federal Reserve is expected to keep borrowing rates unchanged, but traders will be particularly interested in the statement accompanying the Fed's decision. The central bank says it expects to raise interest rates a total of three times this year. It raised them once in March and investors think the next boost will come in June. One of the key debates on Wall Street is whether the Fed will actually raise rates three times or if it will raise them four times in response to more signs of inflation and faster economic growth.

Bond prices were little changed Wednesday morning. The yield on the 10-year Treasury note stayed at 2.97 per cent.

EUROPE SLOWDOWN: After posting its highest growth in a decade during 2017, the 19-country eurozone has come off the boil at the start of the new year, largely because of temporary factors such as cold weather. The European Union's statistics agency said Wednesday that growth across the bloc slowed in the first three months of the year to a quarterly rate of 0.4 per cent from a hefty 0.7 per cent tick the previous quarter. Despite the slowdown, growth was higher than the equivalent in the U.S.

The DAX in Germany soared 1.5 per cent and the French CAC 40 picked up 0.2 per cent. In Britain the FTSE 100 rose 0.3 per cent.

ENERGY: Oil prices were mixed. Benchmark U.S. crude rose 0.1 per cent to $67.30 a barrel in New York, while Brent crude, the international standard, fell 0.5 per cent to $72.75 per barrel in London.

CURRENCIES: The dollar edged up to 109.85 yen from 109.81 yen. The euro slipped to $1.1989 from $1.1993.

ASIA: Japan's Nikkei 225 slipped 0.2 per cent and the Hang Seng in Hong Kong lost 0.3 per cent. South Korea's Kospi gave up 0.4 per cent.

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