Volatility is back on the stock market. After 50 straight sessions that failed to produce an index swing of 1% or more, the Dow Jones Industrial Average (DJINDICES:^DJI) and the SP 500 (SNPINDEX:^GSPC) each notched their third such movement in as many days.
Both indexes fell by nearly 1.5% to essentially erase Monday’s gains.
Today’s stock market
New statistics marked an important milestone for the economy. Average, inflation-adjusted income rose for U.S. households last year for the first time since 2007, according to the latest report from the Census Bureau. The poverty rate registered a solid decline too, as did the percentage of Americans without health insurance.
Apple can’t keep a secret
Apple was the only Dow stock that managed to gain ground on Tuesday. Shares rose 2% as investors grew optimistic that its latest iPhone is finding solid demand in its first week of availability. The company recently discontinued its practice of publishing launch weekend statistics for the smartphone, since, according to management, the figures aren’t a reliable indicator of the device’s popularity.
Yet Wall Street simply looked to third-party information for hints about whether the iPhone 7 and 7 Plus might power a return to sales growth for the tech giant. The early indications, while lacking in context and detail, suggest that the device is selling briskly.
T-Mobile announced on Tuesday that iPhone 7 and 7 Plus launch orders were up over four times the volume of the prior iPhone release. The device also set a single-day sales record for the carrier on Friday. “iPhone 7 is the biggest pre-order in T-Mobile’s history,” CEO John Legere said in a press release.
Rival Sprint was similarly enthusiastic about its sales figures. Pre-orders were up 375% on its network over last year’s release, the company announced. “New and existing customers have been placing orders for iPhone 7 and iPhone 7 Plus at a rate nearly four times greater than this time last year,” executives explained.
Investors can’t glean much from these limited figures, especially since iPhone sales are currently constrained by the supply ramp-up. Still, worries that the device would struggle to spur a significant wave of upgrades appear to have been overblown.
Weight Watchers loses a CEO
Weight Watchers’ shares fell 7% to push the stock to a 60% loss since the beginning of the year. The subscription diet plan specialist surprised Wall Street by announcing that CEO James Chambers is stepping down from his executive position and ending his role on the board of directors.
Chambers’ resignation is effective at the end of this month, and so Weight Watchers has started a search for a permanent replacement. In the meantime, it will be led by three executives who will jointly comprise the “interim office of the CEO”: Nicholas Hotchkin, the company’s chief financial officer, will share the role with Thilo Semmelbauer and Christopher Sobeki, who are both board members.
Weight Watchers took the opportunity to reiterate key parts of its upbeat business outlook. “We remain confident we will deliver revenue and earnings growth in 2016, and that Q3 will be our fourth consecutive quarter of year-over-year member recruitment growth,” Hotchkin said in a press release. It’s likely that these gains will soon end a four-year streak of falling profits for the company. Still, the uncertainty at the CEO position suggests investors should be cautious about jumping into a new position in this stock right now.