Global stocks hold losses, dollar strengthens after Fed

Wed May 3, 2017 4:21pm EDT
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By Chuck Mikolajczak

NEW YORK (Reuters) - World stock markets fell on Wednesday as declines in iPhone sales brought about some concern about consumers' health, while the dollar strengthened in the wake of the policy statement from the U.S. Federal Reserve.

The U.S. Federal Reserve kept interest rates unchanged but downplayed weak first-quarter economic growth and emphasized the strength of the labor market, in a sign it could tighten monetary policy as early as June.

"They were not explicit about a June rate hike but that’s the right approach," said Ryan Sweet, senior economist at Moody's Analytics in West Chester, Pennsylvania.

"The Fed is communicating its mantra of gradual rate hikes. The next time they will likely raise rates would be June."

U.S. stocks held modest losses following the announcement.

Apple Inc (AAPL.O: Quote) was down 0.3 percent but pared earlier losses after it reported a surprise fall in iPhone sales in its fiscal second quarter on Tuesday. The drop came on the heels of a decline in sales for U.S. automakers for April and a soft first-quarter reading on U.S. growth last week.

Even with the decline in iPhone sales, Apple still managed to top earnings estimates in what has been a strong quarter for U.S. companies. Thomson Reuters data shows first-quarter growth is currently expected to be 14.2 percent, the best quarter since 2011, with 357 of S&P 500 companies having reported.

An earlier report by payrolls processor ADP said private employers expanded their payrolls by 177,000 jobs last month, the smallest gain since the 62,000 increase last October as they faced increasing difficulty finding qualified workers.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 1, 2017. REUTERS/Brendan McDermid