US stocks sink as Apple drops after products launch

US stocks sink as Apple drops after products launch
PHOTO: AFP

NEW YORK - US stocks finished sharply lower Wednesday as a morning rally fizzled and Apple shares dropped after unveiling a suite of upgraded smartphone, tablet and television products.

The Dow Jones Industrial Average fell 239.11 points (1.45 percent) to 16,253.57.

The broad-based S&P 500 dropped 27.37 (1.39 percent) to 1,942.04, while the tech-rich Nasdaq Composite Index lost 55.40 (1.15 percent) at 4,756.53.

US stocks rose earlier in the day, following rallies in Asia and Europe, but turned negative at midday.

"The pattern of a see-saw market, one day up, one day down, is here for the time being and investors shift positions accordingly," said David Levy, portfolio manager at Kenjol Capital Management.

Apple, the market heavyweight, fell 1.9 percent after the tech giant launched the new iPhone 6S and 6S Plus with pressure-sensing capacity, a new iPad Pro and an improved Apple TV device.

"Investors were simply not thrilled with today's new product introductions," said Paul Ausick of 24/7 Wall St.

Petroleum-related shares dropped as oil prices tumbled. Dow member Chevron lost 2.5 percent, Apache fell 4.5 percent and driller Nabors Industries slumped 5.1 percent.

United Continental advanced 0.3 percent after the surprise announcement late Tuesday that United Airlines chief executive Jeff Smisek would be replaced by Oscar Munoz and two other United executives were also stepping down in connection with a federal investigation involving the regional airport authority.

Yahoo climbed 2.0 percent despite disclosing that the Internal Revenue Service had refused to promise that it would guarantee a tax-free designation for the spin-off of its Alibaba holdings. Morgan Stanley expressed confidence that the plan would still win the key tax-free status, citing the opinion of Yahoo's tax counsel.

Shares in Chinese Internet giant Alibaba jumped 5.1 percent.

Netflix rose 4.5 percent, snapping a seven-day losing streak for the video streaming company.

Macy's shed 0.5 percent after disclosing plans to close 35-40 stores as it prunes underperforming stores while focusing on digital shopping.

Bond prices were mixed. The yield on the 10-year US Treasury held steady at 2.19 percent, while the 30-year dipped to 2.95 percent from 2.97 percent Tuesday. Bond prices and yields move inversely.

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