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Financial Markets 11/03 15:35
NEW YORK (AP) -- A rebound for some influential Big Tech stocks lifted the
U.S. market on Tuesday despite a drop for Apple and mixed trading elsewhere on
Wall Street.
The S&P 500 rose 0.4%, even though most of the stocks within the index fell.
The Dow Jones Industrial Average dropped 197 points, or 0.4%, and the Nasdaq
composite climbed 0.8%.
The stock market has been shaky recently as technology and
artificial-intelligence stocks swing on worries their prices shot too high in
the frenzy around AI. Several of the most influential AI-related stocks were
firmer Tuesday, which supported the market, after flipping from gains in the
morning to losses in the afternoon a day earlier.
Nvidia rose 2.3% and was the strongest force pushing upward on the S&P 500.
Close behind was another chip company, Broadcom, which rose 3.1%. Also boosting
the market were several companies that are spending heavily on AI. Microsoft,
Amazon and Meta Platforms all rose more than 2%.
Apple was long seen on Wall Street as a Big Tech company that's less
dependent on AI. But it's still feeling the effects of the AI boom.
Memory chips for computers have become more expensive because of the demand
created by the rush to build AI data centers. Those higher costs are hitting
Apple, which said it expects to make less profit from each $1 of its revenue
during the final three months of this year.
That helped send Apple's stock down 1.9%, even though the seller of iPhones
and Mac computers reported stronger profit and revenue for the latest quarter
than analysts expected.
Palantir Technologies fell 1.6% even though it likewise reported a better
profit than expected. The software company said it made more money working with
U.S. companies than from the U.S. government for the first time, as U.S.
commercial revenue soared 148% from a year earlier.
The market's moves came as voters cast their ballots in Tuesday's midterm
elections, where the rising cost of living and AI were issues that crossed
party lines.
History suggests such elections may not matter much for the broad market.
Going back to 1970, the S&P 500 has had a positive return every time in the six
months following a midterm election, according to Brock Weimer, an analyst at
Edward Jones.
Some on Wall Street speculate that a Democratic sweep of Congress this time
around could lead to more regulations and restrictions on AI development. But
Donald Trump would still be president and have the power to veto. And Wall
Street generally prefers split control of Washington, which it sees as offering
less risk of transformative policies that could reshape the economy.
On the winning side of Wall Street Tuesday were stocks of several companies
that reported stronger profits for the summer than analysts expected.
DuPont rallied 8.6% for one of the biggest gains in the S&P 500, and
Celanese climbed 5%.
Revvity rose 7.8% after the life sciences company topped analysts'
expectations and CEO Prahlad Singh said end market conditions are continuing to
improve.
All told, the S&P 500 rose 27.52 points to 7,568.92. The Dow Jones
Industrial Average dropped 197.26 to 51,786.72, and the Nasdaq composite
climbed 207.65 to 25,372.01.
Expectations are high for all kinds of companies to continue to deliver big
gains in profits as the U.S. economy keeps chugging along, even with high
inflation and elevated interest rates. That helped send the S&P 500 to a record
high last month.
An encouraging report on the U.S. job market said Tuesday that employers
were advertising more job openings at the end of September than economists
expected. That helped push the yield on the 10-year Treasury up to 4.96% from
4.91% late Monday.
In the oil market, prices continued to swing. Brent crude climbed above $107
per barrel overnight before briefly dropping below $101 in the morning amid
continued uncertainty about what will happen in the war with Iran. It settled
at $103.60, down 1.1% from Monday.
In stock markets abroad, indexes fell in Europe following a mixed finish in
Asia. South Korea's Kospi dropped 3.6% for one of the world's sharpest moves
due to losses for its two tech giants, Samsung Electronics and SK Hynix.
Stocks rose 0.3% in Australia after the country's central bank raised its
benchmark interest rate for the fifth time this year.
___
AP Writers Elaine Lai, David McHugh and Rod McGuirk contributed to this
report.
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