Wall Street opens mixed as Apple dips

The Dow and the S&P 500 indexes have gained in volatile trading as easing Treasury yields gently lifted rate-sensitive growth stocks while losses in Apple Inc after it dropped plans to boost iPhone production weighed on the Nasdaq.

Equity markets also got a boost from a Bank of England decision to restore financial stability by buying as many long-dated government bonds as needed.

The move lifted British bond prices and pushed global benchmark yields lower.

The yield on the US 10-year Treasury bill came off 12-year highs to hit the day’s low of 3.809 per cent while Germany’s 10-year government bond yield, the benchmark for the euro zone, fell after touching a 11-year high.

“Yields now are approaching the Fed’s desired target level of 4.0 and 4.5 per cent. So once that happens, we should see yields beginning to level off and that should boost equity prices,” said Peter Cardillo, chief market economist, Spartan Capital Securities LLC.

Investors will also pay attention to comments from a slew of Fed officials, including Fed Chair Jerome Powell.

Shares of the world’s most valuable public company lost 3.94 per cent after Bloomberg reported that Apple told suppliers to curtail efforts to increase assembly of its iPhone 14 products by as many as 6 million units in the second half of this year.

Among the 11 S&P 500 sector indexes, technology was the sole decliner, down 1.2 per cent.

“Apple has got so many pieces and any weakness in Apple demand has big knock-on impacts on many spaces, so chips, processing and the outlook for retail sales even,” said Patrick Armstrong, chief investment officer at Plurimi Wealth.

Chipmakers Advanced Micro Devices, Qualcomm Inc Nvidia Corp and Micron Tech were down between 0.3 per cent and 1.9 per cent.

Apple’s production cut added fuel to investor worries about the US Federal Reserve’s push to aggressively increase borrowing costs to tame stubbornly high inflation even at the risk of slowing down economic growth.

In early trading, the Dow Jones Industrial Average was up 75.70 points, or 0.26 per cent, at 29,210.69, the S&P 500 was up 8.09 points, or 0.22 per cent, at 3,655.38, and the Nasdaq Composite was down 12.06 points, or 0.11 per cent, at 10,817.44.

Helping cut some declines on the Nasdaq, Biogen shares surged 35.8 per cent after its Alzheimer’s drug, developed with Japanese partner Eisai, succeeded in slowing cognitive decline.

Eli Lilly & Co, which is also developing an Alzheimer’s drug, rose 7.7 per cent and was the biggest boost to the S&P 500 index.

The CBOE Volatility Index, also commonly known as Wall Street’s fear gauge, tested 34.88 points, its highest level since June 13.

In the previous session, Wall Street’s main indexes sank deeper into a bear market, with the S&P 500 recording its lowest close in almost two years on rate hike worries.

Advancing issues outnumbered decliners by a 3.55-to-1 ratio on the NYSE and by a 2.45-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 29 new lows while the Nasdaq recorded 16 new highs and 140 new lows.

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