Stocks Remain Mixed as Fed Leaves Rates Unchanged
New York (July 27) Stocks remained mixed by mid-afternoon Wednesday after the Federal Reserve opted to leave rates unchanged at its July meeting.
The S&P 500 was down 0.4%, the Dow Jones Industrial Average fell 0.14%, and the Nasdaq rose 0.29%. Benchmark indexes were little changed to where they were before the announcement.
The July vote to hold rates as is was near-unanimous, save for the sole vote from Kansas City Fed President Esther George who voted to raise rates. In a statement following the conclusion of its two-day meeting, the Fed touted improvements to the economy, signaling it was open to a possible move on rates in September.
The likelihood of a move on interest rates in July was low heading into the meeting. A rate hike in July had only a 3% probability, according to CME Group Fed funds futures.
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Apple (AAPL) reported a 15% drop in revenue and 23% decline in per-share earnings in its second quarter as sales of iPhones continued to decline for the second quarter in a row. The number of iPhones sold dropped 15% from the year-ago quarter, but exceeded estimates. The tech giant shocked markets in its previous March-ended quarter after reporting a drop in overall company sales for the first time in 13 years and a fall in iPhone sales for the first time ever.
Apple's services segment, which includes iTunes, Apple Music, Apple Pay, was a bright spot with revenue rising 19% to $6 billion.
"We are encouraged by what has the makings of momentum in high-profit, high-growth and highly predictable recurring revenue streams, most prominently the company's Services business, which includes iCloud, data usage, App Store (and associated licensing/royalties), along with Apple Music, Apple Pay and Apple Care, said Jim Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, and AAPL research director Jack Mohr. The Action Alerts PLUS portfolio owns Apple.
Source: TheStreet
