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US: Apple powers Wall Street; all eyes on Fed

Wednesday, July 27, 2016 - 22:49
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Wall Street was trading higher on Wednesday morning, bolstered by strong results from Apple, and ahead of the Federal Reserve's decision on interest rate hikes.

[NEW YORK] Wall Street was trading higher on Wednesday morning, bolstered by strong results from Apple, and ahead of the Federal Reserve's decision on interest rate hikes.

Apple shares soared 7.4 per cent to US$104.47 after the company sold more iPhones than expected in the third-quarter and gave an upbeat current-quarter forecast.

The stock boosted all three major indexes and helped the S&P 500's information technology index rise 1.1 per cent, outpacing the other 10 major sectors.

The Fed is expected to keep rates unchanged as it wraps up its two-day policy meeting with a statement later in the day.

Investors will look for clues on the timing of the next rate hike as the recent set of strong economic data could make a case for an increase in the coming months.

Traders have priced in a 19.5 per cent chance of a rate increase in September and a 42.8 per cent chance in December, according to CME Group's FedWatch tool.

"The outcome of the Fed's meeting is pretty much baked into the cake today, but the language it uses may cause some movement after that point," said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management.

At 9:38 am ET the Dow Jones Industrial Average was up 59.99 points, or 0.32 per cent, at 18,533.74.

The S&P 500 was up 3.38 points, or 0.16 per cent, at 2,172.56.

The Nasdaq Composite index was up 32.44 points, or 0.63 per cent, at 5,142.49.

Global stocks got a boost after Japan Prime Minister Shinzo Abe unveiled a US$265 billion stimulus package to reflate the country's economy.

Of the 157 S&P 500 companies that have reported results so far, 69 per cent have topped earnings estimates. In a typical quarter, 63 per cent of companies beat expectations, according to Thomson Reuters data.

Shares of Dow component Boeing rose 2.2 per cent after the planemaker's quarterly revenue beat analysts' estimates.

Analog Devices' shares jumped 3.4 per cent after the company struck a deal to buy Linear Technology for US$14.8 billion. Linear's stock was down 3.3 per cent at US$60.43.

Twitter plunged 12.3 per cent after the microblogging service provider reported its slowest quarterly revenue growth since going public in 2013.

Facebook, Amgen and Whole Foods are expected to report after the bell on Wednesday.

Advancing issues outnumbered decliners on the NYSE by 1,699 to 940. On the Nasdaq, 1,436 issues rose and 799 fell.

The S&P 500 index showed 37 new 52-week highs and no new lows, while the Nasdaq recorded 65 new highs and six new lows.

REUTERS