Stocks were mixed on Wednesday as the Nasdaq served as the day’s largest loser, as shares of Apple weighed on the tech index. Apple shares were down more than 4% on Wednesday after one analyst recommended investors take profits in shares.
First, the scoreboard:
- Dow: 17,078.28, +10.7, (+0.06%)
- S&P 500: 2,000.72, -1.6, (-0.1%)
- Nasdaq: 4,572.56, -25.6, (-0.6%)
And now, the top stories on Wednesday:
1. The Federal Reserve released its latest Beige Book report on economic activity, which showed that economic activity continued to grow in each of the Fed’s districts. The pace of growth was little changed from the last Beige Book report, released at the end of July, and the report showed that five districts “explicitly reported that contacts… remained optimistic about future growth.” In a note to clients following the Beige Book report, Jesse Hurwitz at Barclays said, “Taken together, this report is consistent with our expectation of continued moderate economic growth and further tightening in labour markets.”
2. U.S. auto sales had a huge month in August. The annualized pace of sales jumped to 17.45 million in August, up from 16.4 million in July and way more than the 16.6 that was expected by analysts. This was also the highest annualized pace for auto sales in July 2006. Among the notable individual reports were a 20% sales jump for Chrysler, which beat expectations for a 12% increase, and a 9.4% increase for Mercedes-Benz, the luxury carmakers best-ever sales for the month of August. Nissan/Infiniti sales also crushed expectations, growing at an 11.5% pace against expectations for a 2.7% rise.
3. U.S. factory orders jumped 10.5% in July following a 1.5% gain, though this jump was slightly less than the 11% expected by economists. This jump in orders followed the huge 22.5% gain seen in durable goods orders last week.
4. Andrew John Hall, one of the most successful oil traders in the market, sees crude oil prices going to $US150 a barrel within five years. Hall, who is known as “God,” by some of his competitors, sees America’s shale boom receding, pushing oil prices higher. Hall has been telling subscribers to his investing newsletter that he’s been buying up long-dated crude contracts.
5. A report from CNBC said that Tesla has chosen Nevada as the site of its much-anticipated Gigafactory. A Tesla representative told Business Insider that, “We look forward to meeting with Gov. [Brian] Sandoval and other legislators in Carson City, [Nevada] tomorrow to announce a major economic development.”
6. According to a Reuters report, activist hedge fund investor Carl Icahn sold his entire position in discount retailer Family Dollar and took home a $US200 million profit. Icahn was the company’s largest shareholder after taking a 9.4% stake in June, and at the time Icahn pushed the company to seek a sale. As of Tuesday, Dollar General had raised its bid for Family Dollar to $US9.1 billion, or about $US80 per share.
7. Apple shares fell more than 4% as the company continues to deal with the fallout from the leak of nude celebrity photos from its iCloud service, while on Wednesday Andy Hargreaves, an analyst at Pacific Crest, said that investors should take profit in Apple shares. Apple is expected to announce a new lineup of iPhones, as well new payments and wearable products, at an event next week and ahead of this announcement, Hargreaves said: “Based on the work we have done, we do not expect either new segment to drive incremental profits that are meaningful to Apple’s scale in the near to medium term.”
8. The European Central Bank is set to announce its latest monetary policy decision on Thursday morning at 7:45 am ET, with ECB president Mario Draghi set to hold a press conference that begins at 8:30 am ET. Expectations are for the bank to keep rates unchanged, but with the Eurozone economy continuing to flirt with recession, investors are eager to hear if Draghi signals any intention to engage in quantitative easing.
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