Energy, Industrials Weigh on Market

NEW YORK (AP) -- Apple surged to its biggest gain in a year and a half Wednesday and drew closer to $1 trillion in value after it reported stronger iPhone sales and rising prices. But losses for energy and industrial companies left major stock indexes lower.

Already the most valuable company in the U.S., Apple was the biggest gainer of any S&P 500 stock Wednesday and the technology giant finished at another record high. That made up for a lot of losses elsewhere in the market.

Investors were following reports that the Trump administration is considering a higher tax rate on Chinese imports. Energy and materials companies fell with the price of oil and metals and car companies also declined.

Bloomberg News reported that the Trump administration might put a 25 percent tax on $200 billion in imports from China, above the 10 percent it has been considering. China again threatened to retaliate. A day earlier, stocks got a boost from a report the two sides were hoping to hold more talks to resolve their trade war.

China can't match the size of the tariffs the U.S. could put on Chinese exports. But Katie Nixon, chief investment officer for Northern Trust Wealth Management, said the Chinese government is counteracting the new and proposed tariffs by pumping more money into the economy and weakening its currency.

"They're sending a strong signal that they cannot just withstand, but they can manage through a period of turmoil related to the negotiations and they're prepared to do that."

The S&P 500 index slid 2.93 points, or 0.1 percent, to 2,813.36. The Dow Jones Industrial Average lost 81.37 points, or 0.3 percent, to 25,333.82. The jump in Apple stock was worth 77 Dow points.

The Nasdaq composite added 35.50 points, or 0.5 percent, to 7,707.29, but the Russell 2000 index of smaller-company stocks lost 1.54 points, or 0.1 percent, to 1,669.26. Almost two-thirds of the stocks on the New York Stock Exchange traded lower.

The S&P 500 index rose 3.6 percent in July in spite of the trade war between the U.S. and China. The markets got a lift from strong company earnings as well as efforts by the U.S. and European Union to resolve their trade differences.

As expected, the Federal Reserve left interest rates unchanged, but suggested it's likely to raise rates again in September. High-dividend stocks like consumer products makers sank as bond yields increased. Automakers fell as they reported their monthly sales and Ferrari plunged after it said it might not make some of the profit goals laid out by Sergio Marchionne, its late former CEO.

Apple said the average selling price for the iPhone jumped 20 percent in its latest quarter and its third-quarter profit and sales both surpassed analyst projections. Apple's third fiscal quarter is usually its weakest. The company's forecast for fourth-quarter revenue also topped Wall Street estimates.

Apple surged 5.9 percent to $201.50 and it finished the day with a market value of $990.4 billion.

The Federal Reserve left interest rates unchanged and suggested it plans to keep raising rates as long as the economy stays healthy. The central bank noted the labor market continues to get stronger and the economy is growing at a strong clip, while inflation has reached its target of 2 percent a year.

Automakers mostly slid. Ferrari dropped 11 percent to $118 after new CEO Louis Camilleri warned that the company might not be able to reach the revenue targets outlined by Marchionne.

Industrial companies changed course again and took sharp losses.

Bond prices sank. The yield on the 10-year Treasury note rose to 3 percent from 2.96 percent.

Higher yields force interest rates on mortgages and other loans higher, making it more profitable for banks to lend money. However rising yields drew investors to bonds and away from high-dividend stocks like consumer goods makers.

SodaStream jumped 26.3 percent to $110.30 after the maker of beverage carbonation systems raised its annual forecasts following a strong quarterly report. Clothing maker Hanesbrands plunged 19.3 percent to $17.96 after it posted a smaller-than-expected profit and said Target won't renew a contract for an exclusive line of Champion clothing when the deal expires in January 2020.

Benchmark U.S. crude dropped 2 percent to $67.66 per barrel in New York. Brent crude, used to price international oils, fell 2.5 percent to $72.39 per barrel in London.

Wholesale gasoline sank 1.7 percent to $2.05 a gallon. Heating oil gave up 1.9 percent to $2.10 a gallon. Natural gas dipped 0.9 percent to $2.76 per 1,000 cubic feet.

The price of gold gave up 0.5 percent to $1,227.60 an ounce. Silver fell 0.7 percent to $15.45 an ounce and copper plunged 3 percent to $2.75 a pound.

The dollar fell to 111.56 yen from 111.83 yen. The euro slipped to $1.1664 from $1.1697.

Britain's FTSE 100 dropped 1.2 percent and Germany's DAX fell 0.5 percent. The French CAC 40 dipped 0.2 percent.

Japan's Nikkei 225 index rose 0.9 percent and South Korea's Kospi added 0.5 percent. In Hong Kong, the Hang Seng index dropped 0.9 percent.