The major averages were mixed at the open as a better than expected monthly jobs report contended with Apple's (AAPL) worse than expected guidance to be the tone-setting news. Further muddying the picture were conflicting reports on potential trade progress being made with China. The averages searched for direction in early trading before taking a turn lower, led on the downside by the Nasdaq. Despite struggling to rally so far today, the S&P is still on pace for a weekly gain of over 2.5% if current levels hold or improve into the close.
ECONOMIC EVENTS: In the U.S., nonfarm payrolls increased 250,000, which was better than the 200,000 expected. Average hourly earnings edged up 0.2% month-over-month, with the annual rate rising to a 3.1% year-over-year pace. The unemployment rate held steady at 3.7%. The trade deficit widened 1.3% to $54.0B in September.
COMPANY NEWS: Shares of Apple are down about 7% near noon after the iPhone maker reported what it called "another record-breaking quarter," but gave weaker than expected guidance for sales in the holiday season and said it plans to stop disclosing unit sales for the iPhone, iPad and Mac begining with its next quarterly report. Analysts generally called the disclosure worries "noise" and defended the shares, while lowering their targets, but BofA Merrill Lynch analyst Wamsi Mohan downgraded Apple to Neutral from Buy, citing his concern that there are likely to be further negative estimate revisions.
Starbucks (SBUX), in contrast, is up 10% after its fourth quarter earnings and sales trends beat expectations. CEO Kevin Johnson said the company's performance "reflected meaningful improvement in virtually every critical operating metric" compared to last quarter.
Exxon Mobil (XOM) shares are also rising, adding 1% at midday after the energy giant reported better than expected earnings and revenue. Chevron (CVX), which also posted better than expected earnings but reported lower than expected revenune, is up 3% following its mixed report.
MAJOR MOVERS: Among the noteworthy gainers was Pacific Biosciences (PACB), which surged 67% after it agreed to be acquired by Illumina (ILMN) for $8.00 per share. Illumina was 4% higher after the deal news, which was applauded by a number of Wall Street analysts. Also higher was Newell Brands (NWL), which gained over 14% after reporting quarterly results. In addition, Caesars (CZR) rose 6% after the casino operator reported upbeat quarterly earnings, said that a buyout offer from Golden Nugget was rejected for being too low, and announced that CEO Mark Frissora will leave the company.
Among the notable losers was Alkermes (ALKS), which fell 5% after an FDA panel voted against recommending approval for the company's experimental depression treatment. Also lower were Puma Biotechnology (PBYI) and Weight Watchers (WTW), which dropped a respective 51% and 25% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 109.05, or 0.43%, to 25,271.69, the Nasdaq was down 72.22, or 0.97%, to 7,361.83, and the S&P 500 was down 18.60, or 0.68%, to 2,721.77.
Apple
-15.21 (-6.85%)
Starbucks
+5.43 (+9.27%)
Exxon Mobil
+0.95 (+1.18%)
Chevron
+3.72 (+3.34%)
PacBio
+3.03 (+67.18%)
Illumina
+12.17 (+3.89%)
Newell Brands
+2.5 (+15.15%)
Caesars
+0.62 (+7.01%)
Alkermes
-1.59 (-3.89%)
Puma Biotechnology
-19.39 (-50.27%)
WTW
-16.76 (-24.48%)