U.S. stocks open mixed ahead of Fed; Apple soars to record high

Investing.com - U.S. stock markets were mixed to lower after the open on Wednesday, as markets looked forward to the Federal Reserve’s rate statement, while shares in Apple soared to a record high, lifting the NASDAQ higher.

During early U.S. trade, the Dow Jones Industrial Average fell 0.65%, the S&P 500 index slumped 0.45%, while the Nasdaq Composite index gained 0.45%.

The NASDAQ outperformed as shares in consumer electronics giant Apple rallied 6.5% to hit an all-time high of USD454.45 per share.

After markets closed Tuesday, Apple said that fiscal first quarter earnings more than doubled, largely due to a huge jump in iPhone sales. Revenue surged 73% to USD46.3 billion, blowing past expectations for revenue of USD38.85 billion.

The upbeat results prompted Goldman Sachs to raise its price target on the stock to USD600 per share and reiterated its ‘Conviction Buy List’ rating.

Elsewhere on the NASDAQ, cancer drug maker Illumina surged 38.1% after Swiss pharmaceutical giant Roche offered nearly USD5.7 billion for the company. It was the third time since 2007 that the Swiss drug-maker has made a hostile takeover bid for a U.S. company.

Aerospace major Textron saw shares jump 13.2% after reporting stronger-than-expected fourth quarter revenue and offering an upbeat earnings forecast for the full-year.

On the downside, shares in the financial sector performed poorly, tracking their European counterparts lower as concerns over the euro zone’s sovereign debt crisis lingered.

Citigroup saw shares decline 1.65%, while investment banks Morgan Stanley and Goldman Sachs retreated 2.05% and 1.8% respectively after JP Morgan lowered its rating on the stocks to ‘neutral’, citing prospects of tougher capital requirements for investment banks.   

In earnings news, Corning shares tumbled 9% after reporting that fourth quarter profit fell 53% from a year earlier. The company also said it planned to cut capacity in its liquid-crystal-display glass business, as weak demand is leading to "significant" price declines.

Graphics chip maker Nvidia saw shares drop 5.2% after cutting its fourth quarter revenue outlook, citing a global disk-drive shortage due to flooding in Thailand and a slowdown in demand for the company’s Tegra 2 processor.

Across the Atlantic, European stock markets were broadly lower as renewed worries over the threat of Greek default dampened investor demand for riskier assets.

The EURO STOXX 50 tumbled 1%, France’s CAC 40 fell 0.75%, Germany's DAX dropped 0.7%, while London’s FTSE 100 retreated 0.9%.

Later Wednesday, the Federal Reserve was to announce the federal funds rate and publish its official rate statement. In addition, the U.S. was to release industry data on pending home sales.

Meanwhile, the World Economic Forum was beginning its five-day annual meeting in Davos, Switzerland.