Why the US market shrugged off new iPhone, Apple Watch

While some investors cited worries about whether Apple would face supply shortages, others said traders were just taking profits. Apple Inc on Tuesday rolled out its much-anticipated iPhone X, a glass and stainless steel device with an edge-to-edge display that Chief Executive Tim Cook called “the biggest leap forward since the original iPhone.”

It also managed to replicate 1940s comic strip technology in the Apple Watch more than two years after its launch, an advance that analysts say will spur sales

But shares of Apple Inc in overnight trade stunting a euphoric rally in the major Wall Street indices which hit record closing highs on Tuesday.

Apple’s shares closed a volatile trading session 0.4 per cent lower at $160.86 after rising as high as $163.96 following the unveiling of its 10th anniversary edition of the iPhone. Apple’s release date of November 3 was later than some investors had expected.

While some investors cited worries about whether Apple would face supply shortages, others said traders were just taking profits. “There were no blockbuster surprises although what they’re doing with the products is all pretty good,” said Ghriskey.

The new iPhone contained few surprises, with leaked details on the phone and other products including an updated Apple Watch proving largely accurate. But the iPhone X’s $999 price still raised eyebrows, and its Nov. 3 ship date prompted questions about possible supply constraints ahead of the holiday season.

The iPhone maker was the second-biggest drag on the S&P behind McDonald’s (MCD.N), which fell 3.2 percent to a more than one-month low on concerns about its third-quarter results.

The Series 3 of the Apple Watch, released on Tuesday along with the much-anticipated iPhone X, features wireless LTE connectivity. That means customers will be able to make phone calls or send text messages from the watch without needing to have an iPhone nearby, as they do with earlier models.

The ability to make calls with a wristwatch has captured the imagination of tech enthusiasts at least since it was prominently featured in “Dick Tracy,” the comic about a private detective who, starting in 1946, used calls from his wrist to help bust bad guys.

“This has been our vision from the beginning,” Chief Operating Officer Jeff Williams said at the launch event. “Now you can go for a run with just your watch and still be connected. It’s really nice to know you can be reached if needed.”

The S&P 500, Dow Jones industrials and Nasdaq Composite clocked record closes, with investors drawn to riskier assets as concerns about U.S. tensions with North Korea eased and the financial impact from Hurricane Irma appeared less severe than was feared last week.

After the closing bell, Nordstrom shares jumped 8.8 percent after reports that the high-end retailer chose private equity firm Leonard Green & Partners to help take the company private.

The financial sector was the S&P 500’s biggest driver during the regular session as bank stocks were helped by rising U.S. Treasury yields, while the utilities and real estate sectors lost ground.

“It’s a better environment for risk assets. As long as these two issues — North Korea and the hurricane — have receded as concerns, it gives investors a green light to focus on stronger fundamentals,” said David Joy, chief market strategist at Ameriprise Financial in Boston.

The Dow Jones Industrial Average rose 61.49 points, or 0.28 percent, to 22,118.86, the S&P 500 gained 8.37 points, or 0.34 percent, to 2,496.48 and the Nasdaq Composite added 22.018 points, or 0.34 percent, to 6,454.28.

Concerns about Hurricane Irma’s impact receded as it weakened to a tropical depression, while investors shrugged off U.S. President Donald Trump’s comments that the latest U.N. sanctions on North Korea were only a very small step and nothing compared with what would have to happen to deal with the country’s nuclear program.

“A lot of it is the realization that the latest hurricane wasn’t as devastating in the U.S. as people feared,” said Tim Ghriskey, chief investment officer of Solaris Asset Management in New York.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 8, 2017.

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