You are here

US: Stocks regain footing after China-sparked crash

US stocks opened sharply lower on Wednesday after China allowed its currency to weaken further and oil prices slid to their lowest in more than 11 years.

[NEW YORK] US stocks stabilised on Tuesday after Monday's China-sparked crash, but tech giant Apple tumbled 2.5 per cent following a report that it will slash iPhone output due to weak sales.

The Dow Jones Industrial Average added 9.72 (0.06 per cent) to 17,158.66, while the broad-based S&P 500 rose 4.05 (0.20 per cent) to 2,016.71.

But, on the back of Apple's sharp loss, the tech-rich Nasdaq Composite Index fell 11.66 points (0.24 per cent) to 4,891.43.

US stocks on Monday had joined in a global retreat from equities following a 7 per cent plummet in Chinese stocks and tensions between Saudi Arabia and Iran over the Saudi execution of a prominent Iran-backed Shi'ite cleric.

On Tuesday, Chinese markets were steadier after the People's Bank of China pumped 130 billion yuan (S$28.5 billion) into the money market. News reports also said state-controlled funds bought stocks.

Investors are trying to ascertain China and the Saudi-Iran rift "should be something that we should worry about for much of this year, or whether it was simply an opening day flash in the pan," said Sam Stovall, chief investment strategist at S&P Capital IQ.

"It's still unresolved."

Shares of Apple, the largest listed company by market value, sank after Nikkei Asian Review reported that it plans to reduce production of its latest iPhone 6s models by around 30 per cent due to weak sales.

Twitter lost 2.8 per cent following a report that it is considering messages as long as 10,000 characters, much above the current 140-character limit. Many Twitter users sharply criticised the possible change.

Eli Lilly rose 1.5 per cent as it projected 2016 earnings of US$3.45- 3.55 per share, below the US$3.65 expected by analysts. Credit Suisse said that in spite of the lower forecast, it still sees strong opportunities at the drugmaker.

Ford fell 1.8 per cent after December sales came in about 4,000 short of the forecast of 243,590. General Motors dropped 2.6 per cent even as its December sales of 290,230 bested Edmunds expectations by about 3,000. The results cap a strong year for US auto sales.

Gunmaker Smith & Wesson surged 11.1 per cent after projecting earnings for the quarter ending January 31 of 39-41 cents per share, much above the company's December 8 forecast of 27-29 cents.