Stocks were higher in pre-market trading, which was attributed to a report that the U.S. was close to a trade deal with China as well as very strong monthly jobs data. The market could not build any upside momentum, however, faced with the headwind of a disappointing holiday forecast from Apple (AAPL) and a dwon day was cemented when Larry Kudlow said he has become less optimistic about the prospects of reaching a deal with China. The selloff that followed was led by the Nasdaq, which was hit particularly hard by the impact of Apple's report, not only on its own stock but on those of its myriad suppliers.
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. In trade news, White House economic advisor Larry Kudlow told CNBC that there is "no massive movement" in trade talks with China, noting that he was "not as optimistic" as he once was that a deal is on the way. Later on, however, CNBC's Eamon Javers reported via Twitter that U.S. President Donald Trump said that "progress is being made" on a trade deal with China and he believes a deal will happen. In energy news, Baker Hughes reported that the U.S. rig count is down 1 rig from last week to 1,067. WTI oil futures fell another 1% to settle at their lowest since April, closing at $63.14 a barrel. WTI declined by roughly 6.6% for the week, marking its fourth weekly loss in a row.
COMPANY NEWS: Shares of Apple closed 6.6% lower 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 beginning with its next quarterly report.
Starbucks (SBUX), in contrast, rose 9.7% 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.
Meanwhile, Exxon Mobil (XOM) shares were 1.6% higher 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, was up 3.2% following its mixed report.
MAJOR MOVERS: Among the noteworthy gainers was Pacific Biosciences (PACB), which surged 67.6% after it agreed to be acquired by Illumina (ILMN) for $8.00 per share. Illumina was 4.9% higher after the deal news. Also higher was Newell Brands (NWL), which gained over 14.7% after reporting quarterly results. In addition, Caesars (CZR) rose 7.7% 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 7.6% after an FDA panel voted against recommending approval for the company's experimental depression treatment. Also lower were Puma Biotechnology (PBYI) and Kraft Heinz (KHC), which dropped a respective 48% and 9.7% after reporting quarterly results.
INDEXES: The Dow fell 109.91, or 0.43%, to 25,270.83, the Nasdaq lost 77.06, or 1.04%, to 7,356.99, and the S&P 500 declined 17.74, or 0.65%, to 2,722.65.
Apple
-14.63 (-6.59%)
Starbucks
+5.75 (+9.82%)
Exxon Mobil
+1.32 (+1.64%)
Chevron
+3.4 (+3.06%)
PacBio
+3.04 (+67.41%)
Illumina
+15.39 (+4.92%)
Newell Brands
+2.46 (+14.91%)
Caesars
+0.68 (+7.69%)
Alkermes
-3.06 (-7.49%)
Puma Biotechnology
-18.47 (-47.89%)
Kraft Heinz
-5.36 (-9.55%)