Dow Breaks Win Streak as Stocks Slide on China Uncertainty, Apple Outlook - TheStreet

Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average declined on Friday, following three straight days of gains for the blue-chip index.
  • The U.S. added 250,000 jobs to payrolls in October, and annual workers' wage growth rose to 3.1%.
  • Apple Inc. (AAPL) - Get Report   slumped 6.6%, it's worst day in nearly five years, after the iPhone maker's fiscal fourth-quarter earnings and revenue topped Wall Street estimates but its outlook for fiscal first-quarter revenue disappointed.

Wall Street Overview

Stocks ended lower on Friday, Nov. 2, as a slump in shares of Apple Inc. (AAPL) - Get Report offset news of a potential thaw in the U.S.-China trade war and a U.S. jobs report that came in stronger than expected.

A phone call between Donald Trump and Chinese President Xi Jinping on Thursday, Nov. 1, as well as statements from Washington and Beijing, suggested the two sides could be moving closer toward a trade compromise when the pair meet later this month at the G-20 Summit in Argentina. Trump said that discussions were "moving along nicely" while Xi told state television that the two sides should "promote a plan that both can accept to reach a consensus on the China-U.S. trade issue."

However, Larry Kudlow, Trump's top economic adviser told CNBC the administration hasn't been working on a trade plan with China.

"We're doing a normal, routine run-through of things that we've already put together and normal preparation," Kudlow told CNBC. "We're not on the cusp of a deal."

The Dow Jones Industrial Average fell 110 points, or 0.43%, to 25,271, the S&P 500 declined 0.6%, and the Nasdaq was down 1%.

The U.S. economy added more jobs than expected last month, and workers' wage growth accelerated, according to the Labor Department. 

Total nonfarm payroll employment increased by 250,000 jobs, higher than the 190,000 predicted by analysts in a FactSet survey. The unemployment rate held at 3.7%, the lowest since the first year of Richard Nixon's presidency in 1969. Average hourly earnings rose by 3.1% from a year earlier, according to the report.

Apple fell 6.6% on Friday after the iPhone maker's fiscal fourth-quarter earnings and revenue topped Wall Street estimates but its outlook for fiscal first-quarter revenue disappointed. It was the worst percentage decline for Apple since a 7.99% drubbing on January 28, 2014.

The tech giant sold 46.9 million iPhones in the quarter, just shy of consensus forecasts of 47 million.

For the current quarter, Apple said it expects revenue of $89 billion to $93 billion. Analysts were calling for sales of $92.94 billion. Apple cited slowing emerging market growth and a stronger U.S. dollar as factors affecting the weaker-than-expected outlook.

Shares also took a hit after after Chief Financial Officer Luca Maestri stated on the earnings call Thursday that Apple plans to end its historical practice of breaking out iPhone, iPad and Mac unit volumes.

"Overall, it was another strong quarter for the largest publicly traded company in the world. The iPhone, which we view as "the razor" delivered impressive sales totals, and the Services revenue stream, or "the razor blade" continued its momentum," said Jim Cramer and Action Alerts PLUSteam, which holds Apple in its portfolio. "We draw these comparisons to Apple's hardware /services because we think a more accurate portrayal of how the stock should be valued is that of a consumer-packaged goods company, and we are hard-pressed to find one that matches these grow rates."

Starbucks Corp. (SBUX) - Get Report jumped 9% after both fiscal fourth-quarter earnings and revenue topped expectations.

Global comparable sales rose 3% in the quarter, while U.S. same-store sales jumped 4%, better than expected. Sales in China rose 1% from a year earlier - in the previous quarter sales in China dipped 2%. The performance in China was notable given concerns over Chinese growth.

Exxon Mobil Corp. (XOM) - Get Report  reported third-quarter earnings of $1.46 a share, beating Wall Street estimates of $1.22. Revenue of $76.61 billion beat forecasts of $73.55 billion.

Shares of the largest U.S. oil and natural gas company rose 1.6%.

Chevron Corp. (CVX) - Get Report earned $2.13 a share in the third quarter, topping estimates of $2.06. Revenue was $43.99 billion, below forecasts of $46.67 billion. Shares rose 3.2%.

Alibaba Group Holding Ltd. (BABA) - Get Report posted stronger-than-expected fiscal second-quarter earnings but the China-based online retailer said 2019 revenue would be weaker than it had originally forecast, citing "fluid macro-economic conditions."

Alibaba said earnings were $1.11 a share, ahead of the $1.07 consensus. Group sales, while rising an impressive 54% from the same period last year to $12.4 billion, fell shy of the I/E/B/S Refinitiv forecast of $12.5 billion. Alibaba also it was was adjusting its fiscal 2019 revenue outlook by between 4% and 6% to a range of 375 billion yuan to 385 billion yuan, down from the 400 billion yuan level it suggested after its full-year earnings in March.

American depositary receipts of Alibaba fell 2.5%.

Kraft Heinz Co. (KHC) - Get Report slumped 10% on Friday after third-quarter adjusted earnings of 78 cents a share missed Wall Street's expectations by 3 cents. Revenue at the food company was $6.38 billion vs. expectations of $6.31 billion.

What Are "Closed-End" Mutual Funds and How Do They Fit Into a Savvy Investors' Portfolios?Click here to register for a free online video in which TheStreet's retirement expert Robert Powell and an all-star panel run down all you need to know.