U.S. stocks ended Thursday mixed, a drop in jobless claims and China's iPhone restrictions weighing on tech mega caps and leading the Nasdaq to notch its fourth consecutive day of losses.
The Nasdaq sank 0.9%, adding to yesterday's 1.1% loss. The S&P 500 fell 0.3% while the Dow Jones Industrial Average snapped a two-day losing streak to close up 0.2%.
Chinese authorities are reportedly expanding their ban on iPhone use among federal officials to include employees of state-owned enterprises. Apple (AAPL) shares sank 2.9% after falling 3.6% Wednesday, its biggest two-day decline in a month.
Meanwhile, the number of initial jobless claims fell in the last week of August to its lowest level since February, renewing fears stubbornly high inflation will prompt the Federal Reserve to continue raising rates.
Stocks sank yesterday as oil prices hovered around a 10-month high and a measure of U.S. services business unexpectedly jumped to its highest since February.
Dow Dodges Tech Tumble to Post Gains
The Dow Jones Industrial Average gained 0.2%, or about 58 points, as investors appeared to seek the safety of Dow healthcare and consumer staples stocks while tech stocks fell on inflation concerns.
Intel (INTC) shares notched a ninth straight day of gains, rising 3.2% and putting it on track for its best run in years.
The healthcare sector as a whole gained about 0.5%, with Amgen (AMGN) moving up 2.2%, Merck & Co. (MRK) adding 1.4%, and Johnson & Johnson (JNJ) rising 1.3%. UnitedHealth Group (UNH), the most expensive of the Dow 30 stocks, gained 1.6%, helping boost the price-weighted index.
Retail and consumer stocks also fared well, with Walmart (WMT), McDonald's (MCD), and Procter & Gamble (PG) each adding about 1%. Home Depot (HD) ticked up by 0.9%.
Apple shares dropped 2.9% as it continued to slide on China’s iPhone ban, despite questions over its impact. Other tech stocks followed, with Microsoft (MSFT) giving up about 0.9% and Cisco Systems (CSCO) dropping 0.7%.
Walgreens Boots Alliance (WBA) dropped 2.7%, declining for the fifth straight session after its CEO resigned. Nike (NKE) shares fell 2.3%, dropping for the third consecutive day. The sneaker maker’s shares have lost more than 17% of their value so far this year over inventory issues and concerns about China’s economic slowdown.
China Takes a Bite Out of Apple—and its Suppliers
Shares of Apple (AAPL) fell more than 3% again Thursday on reports China plans to expand its ban on the use of iPhones by federal workers to include state-owned companies and government-sponsored agencies.
While some believe the sell-off is overblown, the stock’s slide today has wiped about $90 billion from its market capitalization, taking the two-day total to nearly $200 billion.
But it’s not just Apple that’s suffered. Some suppliers have been hit even harder by the news. Qualcomm (QCOM) shares dropped more than 7%, erasing nearly $10 billion from its market cap. Japan-based Murata Manufacturing (MRAAF) lost 5% today, as did chipmaker Cirrus Logic (CRUS).
Collectively, a selection of 15 of Apple’s major suppliers—including Broadcom (AVGO), BYD Co. (BYDDY), Micron Technology (MU), and Taiwan Semiconductor (TSM)—have lost about $40 billion in market cap today.
Bank Deposits Fell for Fifth Straight Quarter in Q2
Deposits at Federal Deposit Insurance Corp. (FDIC)-insured banks were down for the fifth straight quarter in the period ended June 30, while net income fell by double digits, the FDIC's latest Quarterly Banking Profile showed.
Total deposits for more than 4,600 FDIC-insured banks fell $98.6 billion in the second quarter after plunging by $472 billion in the first quarter amid this year's banking crisis. The second-quarter drop marked the biggest quarterly decline on record.
The decline was mostly driven by uninsured deposits, or those that exceed the FDIC's $250,000 insurable limit. These fell $180.6 billion, or 2.5%, after tumbling more than half a trillion dollars in the previous quarter.
By contrast, insured deposits in the second quarter were up nearly $85 billion, or 0.8%, from the previous quarter.