Dow Hits Another Record, but Apple and Krispy Kreme Fall
Stocks traded flat for most of today's session, but the S&P 500 and Dow Jones Industrial Average finished with small gains, pushing them into record territory once again. On the day, the blue chips finished up 26 points or 0.2%, to close at 16,743, while the S&P gained just 0.7%. The Nasdaq closed down 0.1%.
The market had opened the day lower, but recovered once the Institute for Supply Management revised its manufacturing index higher at 55.4 after initially reporting a reading of 53.2. The corrected figure was slightly below estimates at 55.6, but still above April's reading at 54.9, indicating accelerating manufacturing growth. Other economic reports pointed to signs of improving economic activity as well. Volume was low as the typically slow-trading summer months begin.
Apple shares finished the day down 0.7% after the iPhone-maker unveiled several new updates and products at the Worldwide Developers Conference, which is being held all this week. Apple announced an update to its Mac operating system, called Yosemite and is similar to its iOS 7 operating system for the iPhone, which received mixed reviews. It also said it would release iOS 8 this fall. Other additions include Healthkit, an app that collects and analyzes users' health data, which its developed along with Nike, renewing its partnership with the sneaker brand. Apple shares will be closely watched this week as the company provides more insight on its near-term future. The mild sell-off indicates that investors were perhaps expecting a bigger announcement, but the stock is trading near a 52-week high after its acquisition of Beats Electronics. Its recent rise is a sign that investors are beginning to believe that the company can release yet another blockbuster product as it did with the iPod, iPhone, and iPad.
After hours, Krispy Kreme Doughnuts were giving investors an upset stomach, as shares dropped 10% after the donut chain provided weak guidance in its quarterly report. Like many retailers, Krispy Kreme blamed poor weather for a sluggish first quarter though overall domestic same-store sales improved 2.3% even while comps declined at company stores. Revenue inched up 0.8% $121.6 million, well short of estimates at $126.7 million, while EPS improved from $0.20 to $0.23, matching estimates. Finally, management cut its full-year EPS forecast from $0.73 to $0.79 to $0.69 to $0.73, citing a weak first quarter and higher costs for an enterprise resource planning system and executive management succession. Those additional expenses seem like solid investments for the future rather than red flags, and its profit guidance still represents an increase of 15% from a year ago. Though the stock tumbled after today's report, there doesn't to be any long-term weakness investors should be concerned about.
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The article Dow Hits Another Record, but Apple and Krispy Kreme Fall originally appeared on Fool.com.Jeremy Bowman owns shares of Apple and Nike. The Motley Fool recommends and owns shares of Apple and Nike. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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