Dow Jones over 22,000 points for the first time thanks to Apple, other stocks fall
Stocks are mostly lower Wednesday, but a big gain for Apple sent the Dow Jones industrial average above 22,000 for the first time. Movie theater companies and studios are tumbling after AMC Entertainment gave a weak forecast and said it will cut costs. Health care companies are down as prescription drug distributor Cardinal Health gets pummeled after cutting its forecasts for the year.
KEEPING SCORE: The Dow, which tracks 30 big-name U.S. companies, climbed 36 points, or 0.2 percent, to 22,000 as of 3:15 p.m. Eastern time. Apple added 53 points to the venerable index, although a loss for Disney canceled out some of those gains.
The Standard & Poor's 500 index, a much broader market measure used by most professional investors, fell 2 points, or 0.1 percent, to 2,473. The Nasdaq composite lost 9 points, or 0.2 percent, to 6,353. The Russell 2000 index of smaller-company stocks shed 15 points, or 1 percent, to 1,413.
Two stocks fell for every one that rose on the New York Stock Exchange.
APPLE GETS AN 'A': Apple's fiscal third-quarter profit and sales were better than experts had anticipated. Perhaps just as important, the company offered a strong sales projection. Apple stock had slipped in the last two months because some investors were worried that the production problems would delay the launch of the next iPhone, which would have hurt the company's fourth-quarter sales. But Apple's revenue estimate was better than expected and greater than last year, when the iPhone 7 was released.
The stock climbed $7.17, or 4.8 percent, to $157.22.
HORROR FILM: Movie theater operators plunged after AMC Entertainment said U.S. box office receipts dropped 4.4 percent in the second quarter, and it expects the third quarter to be difficult as well. AMC it also taking a charge of $200 million because its investment in another chain, National CineMedia, lost value. The company is also planning to slash costs by cutting operating hours and staff levels while trying to boost revenue with new pricing plans and discounts.
AMC dropped $4.93, or 23.7 percent, to $15.88 and Regal Entertainment sank 94 cents, or 4.9 percent, to $18.15. Cinemark Holdings lost $2.16, or 5.4 percent, to $37.60.
Companies that make movies, or let customers stream them, also took sharp losses. Disney fell $2.76, or 2.5 percent, to $107.85 and CBS gave up $2.01, or 3 percent, to $64.07. Viacom dipped $1.47, or 4.1 percent, to $34.06 and Netflix shed $1.85, or 1 percent, to $180.18.
BIG DIVE: Retailers also stumbled. Big 5 Sporting Goods reported a weak profit and sales that fell short of analysts' forecasts. Big 5 said sales of firearms, camping and water sports equipment fell, and its estimates for the current quarter fell short of Wall Street's estimates. Its stock tumbled 90 cents, or 8.2 percent, to $10.05.
Car retailer AutoNation also had a disappointing quarter as prices for used cars fell. It dropped $2.38, or 5.7 percent, to $39.59.
THE QUOTE: Despite Wednesday's mixed results, Kate Warne, an investment strategist for Edward Jones, said investors are encouraged that companies are reporting rising profits based on greater revenue and strong demand, not stock buybacks and other financial moves.
"Companies are reporting better than expected earnings because of growing sales," she said.
CARDINAL SEES RED: Prescription drug distributor Cardinal Health forecast a much smaller profit than analysts expected. The company said it's being hurt by lower prices for generic drugs, as well as smaller increases in the prices of brand-name drugs and the loss of a contract with the Safeway grocery chain. The company's stock lost $7.11, or 9.2 percent, to $70.22.
ILLUMINA LIGHTS UP: Genetic tools company Illumina raised its projections for the rest of the year after solid results in the most recent quarter. The company said demand for its NovaSeq genetic sequencing system was better than expected, and its stock gained $21.76, or 12.6 percent, to $194.06.
OIL: Benchmark U.S. crude added 43 cents to close at $49.59 a barrel in New York. Brent crude, the international standard, picked up 58 cents to close at $52.36 a barrel in London. In other energy trading, wholesale gasoline fell 2 cents to $1.64 a gallon, heating oil rose 2 cents to $1.66 a gallon and natural gas held steady at $2.81 per 1,000 cubic feet.
METALS: Gold fell $1 to $1,278.40 an ounce. Silver decreased 3 cents to $16.73 an ounce. Copper stayed at $2.88 a pound.
BONDS: Bond prices inched lower. The yield on the 10-year Treasury note rose to 2.26 percent from 2.25 percent.
CURRENCIES: The dollar rose to 110.50 yen from 110.30 yen. The euro edged up to $1.1882 from $1.1801.
OVERSEAS: Germany's DAX lost 0.6 percent and the CAC 40 in shed 0.4 percent. Britain's FTSE 100 gave up 0.2 percent. Japan's Nikkei 225 rose 0.5 percent and South Korea's Kospi gained 0.2 percent. Hong Kong's Hang Seng index advanced 0.2 percent.