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S&P 500 at new record on Apple earnings; Dow drops

The S&P 500 on Wednesday (July 23) closed at a new record high after strong Apple earnings lifted the tech sector on a mixed day for stocks.

NEW YORK: The S&P 500 on Wednesday (July 23) closed at a new record high after strong Apple earnings lifted the tech sector on a mixed day for stocks.

The S&P 500 added 3.48 points (0.18 per cent) at 1,987.01, breaching a record set three weeks ago by about three points.

The Dow Jones Industrial Average dropped 26.91 points (0.16 per cent) to 17,086.63, dragged down by a hefty fall by Boeing.

The tech-rich Nasdaq Composite Index jumped 17.68 points (0.40 per cent) to 4,473.70.

"There's less talk of geopolitical concerns, whether it be in Gaza or Ukraine, and more discussion of fundamentals," said Art Hogan, chief market strategist at Wunderlich Securities.

"On balance, earnings have been better than expected."

Apple, the biggest publicly traded company in the US, gained 2.6 per cent on the Nasdaq as profits for its fiscal third quarter rose 11.6 per cent to US$7.7 billion due to strong demand for iPhones, particularly in China.

Boeing dropped 2.3 per cent, the biggest Dow decliner, despite reporting second-quarter earnings that bested expectations by a wide margin and raising its full-year profit outlook. Analysts were troubled by a US$272 million after-tax charge for a US Air Force tanker contract.

Caterpillar, another Dow component, lost 1.5 per cent as it disclosed lower industrial machine sales for the last three months. The biggest declines came in the resources sector, which fell 49 per cent in April and 38 per cent in June. Caterpillar is to report quarterly earnings on Thursday before the equities markets open.

PepsiCo rose 1.9 per cent as second-quarter earnings of US$1.32 per share bested analyst expectations by nine cents and the beverage company raised its full-year profit forecast.

Other companies that reported earnings included Biogen (+11.2 per cent), Delta Air Lines (+3.9 per cent), Dow Chemical (+3.0 per cent), Freeport-McMoRan (-0.4 per cent), Northrop Grumman (+0.1 per cent), Weatherford International (+1.7 per cent) and Whirlpool (+1.4 per cent).

In non-earnings news, Puma Biotechnology bolted 295.4 per cent higher to US$233.43 after a trial of its neratinib treatment for breast cancer resulted in a 33 per cent improvement in disease-free survival of the survey population. The company plans to file for regulatory approval for the medication in the first half of 2015.

Bond prices were mixed. The yield on the 10-year US Treasury fell to 2.46 per cent from 2.47 per cent on Tuesday, while the 30-year held rose to 3.26 per cent from 3.25 per cent. Bond prices and yields move inversely.

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