U.S. stocks started the year on a positive note on Wednesday after a volatile trading session saw indexes erase their earlier losses, as a rebound by oil prices and worries about softer global growth were unable to dampen investor sentiment. The Dow Jones Industrial Average rose 18.78 points to finish at 23,346.24, while the S&P 500 index climbed 3.18 points, or 0.1%, to 2,510.03. The Nasdaq Composite Index rose 30.55 points, or 0.5%, to close at 6,665.94.
European markets meanwhile started off on a negative note as a poor day of trading in Asia and earlier bearish sentiment weighed on stocks. The Stoxx Europe 600 lost 1.1% to 334.03 and Germany’s DAX 30 dropped by 0.7%. The U.K.’s FTSE 100 fell by 1.2% to 6,649.53 whilst France’s CAC was the biggest regional loser, falling by 1.9% to 4,640.10.
Apple cuts outlook
Apple Inc. cut its revenue outlook for the first time in almost two decades citing weaker demand in China, triggering a slump for Asian suppliers and a wave of lower price targets on Wall Street. The announcement, made in a letter from Chief Executive Officer, Tim Cook to investors, comes after weeks of signals from inside Apple and its supply chain indicating the Cupertino, California-based company is struggling to sell the latest iPhones released in September.
Cook said sales will be about $84 billion in the quarter ended Dec. 29, down from earlier estimates of $89 billion to $93 billion. Apple posted sales of $88.3 billion in the fiscal first quarter a year earlier, so the new forecast would mean Apple is reporting a holiday quarter slowdown for the first time since Cook became CEO in 2011. Shares of Apple were down 7.8 percent in pre-market trading in New York Thursday.
Tesla cuts prices
Tesla Inc also saw pressure after it cut U.S. prices for all its vehicles on Wednesday to offset lower green tax credits, and fell short on quarterly deliveries of its mass-market Model 3 sedan, sending shares of the electric vehicle maker down nearly 7 percent on worries of future profitability. The lower price comes as automakers expect U.S. new vehicle sales to weaken in 2019, and amid increased competition from new electric vehicle entrants.
Tesla sales benefited from a $7,500 federal tax credit on electric vehicles throughout 2018, but that full credit expired at the end of 2018, and new buyers will now receive only half that amount. The price cut of $2,000 beginning on Wednesday on the Model 3 – as well as on its higher-priced Model S and Model X – took the market by surprise and weighed on the stock, pushing it down 6.8 percent to close at $310.12, after falling as much as 10 percent during the session.
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