News Column

Markets week Growing Apple sets a new high

August 23, 2014

Nick Fletcher

Apple caught the eye of investors last week, hitting a record high and helping lift America's S&P 500 to a new peak.

The company has nearly doubled in value since a low of $55 in April last year, adding some $300bn to its market value as investors bet on the success of its new products, including the forthcoming iPhone 6 and its rumoured iWatch. The company was also helped by positive comments from activist investor Carl Icahn, who bought Apple stock last autumn, and yesterday its shares reached the dizzy heights of $101.24 despite worries about supply problems for the new iPhone (see above).

Overall, despite a rather downbeat performance yesterday, global markets spent the week shrugging off continuing tensions between Russia and Ukraine and worries about a rise in interest rates.

As well as the S&P hitting a record 1,994, the FTSE 100 finished the week 86 points higher at 6775.25 despite slipping 2.41 points yesterday. Volumes were fairly light as the summer lull continued, especially with the bank holiday approaching.

With a Russian convoy entering Ukraine and ratcheting up the dispute between the two countries, as well as continuing violence in Gaza and Syria, investors remained wary of the geopolitical outlook.

Traders also spent the week contemplating a rise in interest rates, with two Bank of England members unexpectedly having voted for an increase in UK borrowing costs at this month's meeting. The US Federal Reserve's latest minutes also seemed to suggest a rise might be on the cards earlier than expected, and Fed chair Janet Yellen's speech yesterday at the Jackson Hole central bank meeting did not dispel that idea. The week's US data - including a sharp drop in jobless claims and existing home sales hitting a 10-month high - also pointed to a recovering economy and therefore less need for central bank stimulus measures.

There was also a spate of takeover speculation. Vodafone rose 3.25p to 205.85p yesterday on talk of renewed interest from US rival AT&T, while AstraZeneca added 6.5p to pounds 44.18. Next week rejected suitor Pfizer could return with a new offer if AstraZeneca's board agrees, although analysts were sceptical of the idea.

Struggling supermarket Tesco was under pressure on talk that new chief executive Dave Lewis should cut its dividend, but hopes of an improvement in its market share performance in Kantar Worldpanel figures next week helped limit the damage, and it climbed 2.5p yesterday to 248p.

The prospect of an interest rate rise was likely to hit high street retailers, according to analysts at Barclays, who turned negative on the sector.


The sales of existing homes in the US reached a 10-month high this week

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Source: Guardian (UK)

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