US open: Stocks down after disappointing Apple earnings

US stocks were down in the wake of disappointing quarterly results from Apple, while there was a torrent of corporate earnings and economic data.

At 1517 BST, the Dow Jones Industrial Average slipped 0.39% to 18,097.81 points, the S&P 500 fell 0.42% to 2,134.07 points and the Nasdaq declined 0.49% to 5,257.53 points.

Oil prices retreated, as investors doubted that OPEC’s proposed cut in production would go ahead as the cartel’s members continued to disagree.

Brent crude dropped 2.11% to $49.74 a barrel and West Texas Intermediate was down 1.897% to $49.03 at 1440 BST.

Shares in Apple tumbled 3.51% after it reported fourth-quarter results after close on Tuesday that net income declined 19% to $9bn, on revenue of $46.9bn, down 9%. Although income was a little better than expected, revenue fell short of analysts’ forecasts.

Connor Campbell, an analyst at Spreadex, said: "Slipping by just shy of half a percent it seems the main thrust of the Dow’s decline this afternoon stemmed from Apple’s own fall, the tech giant dropping by 3.5% following yesterday’s fourth quarter report. The rate-hike fearing index likely wasn’t helped by a better than forecast flash services PMI (at 54.8 against the 52.4 expected), though that particular narrative thread lacked its usual stronger dollar companion, with the greenback losing 0.2% to the pound, while admittedly taking the same amount off the euro."

Coca-Cola’s shares rose 0.29% as the beverage maker reported that quarterly revenue fell 7%, compared to last year, to $10.6bn, but beat expectations of $10.5bn.

Shares fell 0.53% in aircraft maker Boeing as its third quarter earnings rose to $2.28bn or, $3.60 a share, up from $2.47 last year, but revenue fell to $23.9bn from $25.85bn.

Cable operator Comcast’s shares tumbled 2.12% as it reported that net income rose 12% to $2.24bn, or 92 cents a share, in line with expectations, while revenues increased 14% to $21.3bn thanks to the Rio Olympics and the presidential election.

Shares in Oreo maker Mondelez International increased 2.22% as it said its third quarter profit beat expectations as it earned 52 cents per share, analysts had anticipated 43 cents, while net revenue fell 6.6% to $6.4bn, which had expectations of $6.45bn, but organic revenue rose 1.1%.

Meanwhile on the interest rate watch, analysts at Capital Economics said the Federal Reserve is likely to delay a hike until December. The Fed is due to announce its policy decision on 2 November.

“The markets are convinced that the Fed will stand pat at the upcoming Federal Open Market Committee meeting, which concludes next Wednesday, and will instead raise interest rates at the final policy meeting of the year in mid-December. We broadly agree with that view, but wouldn’t rule out the possibility of a surprise November rate hike.”

Markit’s seasonally adjusted flash composite PMI output index rose to 54.9 in October, from 52.3 in September and above the 50.0 no-change value for the eighth month running, which was the sharpest expansion of private sector output since November 2015.

The Commerce Department reported that wholesale inventories for September rose 0.2% to $590.7bn, while the international trade deficit fell to $56.1bn from $59.1bn from August.

Data for new home sales for September revealed that it rose 3.1% from August to a seasonally adjusted rate of 593,000. Economist had expected 600,000.