Wall St edges lower after recent rally as Apple lags

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks dipped on Wednesday, as a drop in shares of Apple Inc. threatened to put an end to a six-day run of gains for the S&P 500 and weighed heavily on the Nasdaq.

Apple shares slumped 5.1 percent to $469.45, on track for its steepest drop since April, and was the biggest drag on both the S&P 500 and Nasdaq 100 indexes. Credit Suisse, UBS and Bank of America Merrill Lynch each lowered their rating on the stock to "neutral" after the company unveiled new iPhone models Tuesday.

"Part of the problem is (analysts and consumers) keep comparing everyone who speaks, every product that comes out to what Steve Jobs would have done," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

 

"Apple is a great company, they've done the right thing in coming up with two price products to meet the marketplace - it's Apple and everybody likes to take a shot at it."

Market nervousness over a possible Western military strike against Syria abated after President Barack Obama pledged Tuesday to explore a diplomatic plan by Russia to take away Syria's chemical weapons, though the president voiced skepticism about it.

Obama asked leaders in Congress to put off a vote on his request to authorize the use of military force against Syria in order to allow diplomacy to play out.

"That is going to cause a little bit of angst, it won't cause the market to implode. The only reason that would happen is if these diplomatic efforts fail once again and the prospect of a real strike looms large again," Polcari said.

Market participants were also looking ahead to a two-day policy meeting for the Federal Reserve on September 17, during which a decision is expected on trimming its massive bond-buying program. That stimulus has been key in buoying the economy and boosting the benchmark S&P 500 this year by nearly 18 percent.

The S&P 500 has gained 3.1 percent over the prior six sessions, its longest winning streak in two months, as concerns ebbed about a Western military strike against Syria and as data showed improving growth in China, the world's second-biggest economy.

The Dow Jones industrial average rose 43.1 points, or 0.28 percent, to 15,234.16, the S&P 500 lost 3.29 points, or 0.2 percent, to 1,680.7 and the Nasdaq Composite dropped 17.468 points, or 0.47 percent, to 3,711.554.

Texas Instruments edged down 0.3 percent to $40.17 after the No. 3 U.S. chipmaker lowered its third-quarter forecast.

Economic data showed wholesale inventories for July edged up 0.1 percent, less than an expected rise of 0.3 percent, but better than June's 0.2 percent decline.

Harvest Natural Resources Inc surged 24.1 percent to $5.15 after the oil and gas producer said it was in exclusive talks to sell itself to Argentina's Pluspetrol in a deal valued at about $373 million including debt.

(Editing by Bernadette Baum)