Stocks returned to session highs on Tuesday, Sept. 12, as Apple Inc. (AAPL) laid out its latest product launches, including a new version of its smartwatch and iPhone.
The Dow Jones Industrial Average was up 0.27%, while the Nasdaq added 0.24%. The S&P 500 rose 0.24% after scoring a record intraday high of 2,495 earlier in the day.
Apple unveiled its highly anticipated iPhone 8 and iPhone X models during a press event with no major surprises. The iPhone 8 has a steel-reinforced glass design and stronger material to prevent cracks in what Apple calls its "most durable ever." The 8 has a 4.7-inch display and the 8 Plus has a 5.5-inch display. The latest model will be available on Sept. 22.
The buzzier iPhone X was revealed as a new model in tribute to the original iPhone's 10-year anniversary. The newest model is comprised of a front and back glass screen held together by a stainless steel band. The 5.8-inch display has 458 pixels per inch, the most ever for an iPhone. The new model relies on face ID for access to the phone instead of touch ID in current models.
Apple also unveiled a new Apple TV which provides higher resolution, 4K movies and TV shows via iTunes and its latest version of its smartwatch, the Apple Watch 3. The new watch now provides cellular service and will be able to take calls and stream music.
Financials took a swing higher as U.S. tax reform again became a focus. Treasury Secretary Steven Mnuchin again amped up expectations of tax reform before the year is out, even bringing up the possibility of backdating changes to Jan. 1. At a CNBC "Delivering Alpha" event, Mnuchin said the Trump White House was "super focused" on reform, particularly now that a deal to fund the government through December was made last week.
However, Mnuchin did back off Donald Trump's pledge of a decrease in the corporate tax rate to 15% and said it may not be able to be achieved "given the budget issue."
Major banks including Wells Fargo & Co. (WFC) , Bank of America Corp. (BAC) , Citigroup Inc. (C) , Goldman Sachs Group Inc. (GS) and U.S. Bancorp (USB) were all higher on Tuesday. The Financial Select Sector SPDR ETF (XLF) increased 1.2%.
Irma lost some of its steam over the weekend and was downgraded to a tropical storm early Monday as it moved along the Florida coastline and into the southeastern U.S. Irma's strong gusts and powerful storm surge still caused life-threatening conditions, but maximum sustained wind speeds fell to 65 mph from Irma's peak wind speed of 185 mph late last week.
The latest reports said close to 7 million homes and businesses in several states lost power, with the majority of outages in Florida, the Associated Press reported. Utility officials said it could take weeks to restore electricity to everyone. About 70% of Miami is without power Monday.
Irma could still have a sizeable impact on U.S. growth, though. Moody's analysts said combined damages from hurricanes Harvey and Irma could fall in between $150 billion and $200 billion. Goldman Sachs analysts anticipate hurricane damage to have shaved 80 basis points off of third-quarter growth, putting the total at 2%.
"If damages are significantly higher -- or if Florida flooding continues to weigh on consumer spending and housing/investment activity into late September and October -- we would expect additional downside to near-term growth," Goldman said.
Cruiselines including Royal Caribbean Cruises Ltd. (RCL) and Carnival Corp. (CCL) will resume operations out of Florida on Tuesday. Departures out of Florida had been put on hold for four days as Hurricane Irma crossed the state. Resumption of service is dependent on Port Everglades and Port Miami reopening operations.
U.S. job openings rose in July, according to the latest Job Openings and Labor Turnover survey. Monthly job openings increased to 6.17 million in July, the Bureau of Labor Statistics reported on Tuesday, up from 6.12 million in June. Economists expected a dip in the number of openings.
Crude oil prices were in flux on Tuesday even after a monthly report from the Organization of Petroleum Exporting Countries showed a decline in production in August inside and outside of the cartel. OPEC's August outlook declined by 79,000 barrels a day to 32.76 million as production in Iraq, Libya, Gabon and Venezuela dropped. Hurricane Harvey also crippled production in the U.S.
West Texas Intermediate crude was up 0.5% to $48.29 a barrel on Tuesday.
Equifax Inc. (EFX) stabilized on Tuesday in the ongoing fallout after a serious security breach resulted in as many as 143 consumers' data being compromised. Standard & Poor's said late Monday that it changed the outlook on Equifax's credit rating to negative from stable after breach. Equifax's BBB+ credit rating could be lowered if costs to address the internet attack mount or if the company's revenue declines as a result of the incident, S&P said in a statement.
"With substantial litigation expected and potential fines, as well as uncertainty surrounding costs to remediate and possible strategy shifts, we expect that debt leverage could remain elevated," S&P said.
MGM Resorts International (MGM) edged lower on Tuesday after announcing plans to repurchase 10 million shares from its largest shareholder Tracinda Corp. for $32.75 a share, 1% less than its Monday close. Tracinda will remain the largest shareholder following the buyback with a total share of 8.3%. CEO Jim Murren called the move a "prudent and efficient way" of repurchasing its shares.
DowDuPont Inc. (DWDP) has altered its plans to separate its business after successfully completing a planned merger earlier on Aug. 31. The newly formed company will now move any unit with more than $8 billion in annual sales from its materials division over to its specialty chemical unit. The company had previously planned to split into three companies divided into agriculture, specialty chemical, and materials. A number of activist investors, including Daniel Loeb's Third Point, had pushed for a change to its post-merger plans.
Alexion Pharmaceuticals Inc. (ALXN) was active on Tuesday after announcing plans to cut one-fifth of its global workforce and move its headquarters from Connecticut to Boston. Restructuring efforts should provide savings of around $250 million in adjusted profit by 2019, while expenses should total $340 to $440 million. Alexion expects to complete its move to Boston by mid-2018, though a number of research-based jobs will remain at its New Haven, Ct. location.
Updated from 12:49 p.m. ET, Sept. 12.
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