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iPhone buzz drives Nasdaq

Tuesday, September 04, 2012 - 02:05

Sept. 4 - Summary of business headlines: Apple picks a date, raising iPhone 5 speculation; U.S. manufacturing shrinks for third consecutive month; August U.S. auto sales stronger than expected; Europe waits for ECB plan. Conway G. Gittens reports.

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U.S. investors returned from a long holiday weekend to a somber greeting from the manufacturing sector. Business activity shrank in August; the biggest contraction in more than three years and the third contraction in a row, according to the Institute for Supply Management. Exports continue to disappear, although at slower rate than the previous month, and employment is down to 2-1/2 year lows. The survey dims expectations for Friday's important jobs report, which could be the catalyst for new stimulus from the Federal Reserve. But all news was not grim. Speculation surrounding the next iPhone grew louder after Apple sent out invitations to a September 12th event. As usual, the cryptic invitiation only said "It's almost here"; with the number 12 and a shadow of the number 5...as in iPhone 5. Speaking of five, shares of Apple were up, but for a fifth day failed to hit a record high. U.S. automakers posted double-digit domestic sales gains in August. A switch to more fuel-efficient models and easier credit were two factors behind the better than expected numbers. To the markets now: Wall Street is coming off its best month since February, but heading into what is typically the worst month of the year, reminds Stock Trader's Almanac Editor-in-Chief Jeff Hirsch. SOUNDBITE: JEFFREY HIRSCH, EDITOR-IN-CHIEF, STOCK TRADER'S ALMANAC (ENGLISH): "You have to buy when people are selling and sell when people are buying. You got to be in the right stocks and in the right sectors. Luckily, you know, September and October is the beginning of most of the bullish sectors seasonally, so it's a good time to be looking for stocks. The market is up here near the highs. I think we are ripe for a bit of a pullback right now." Some of that pullback hit the Dow and S&P 500 on Tuesday, but the Nasdaq was up, thanks to Apple. Meantime, European investors hope the European Central Bank will announce a fix for the debt crisis this week. Major markets were down between 1.2 and 1.6 percent. Conway Gittens, Reuters