Stock Market Today: Dow closes lower as Apple slump, fresh inflation fears bite

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Stock Market Today: Dow closes lower as Apple slump, fresh inflation fears bite
Credit: © Reuters. -- The Dow closed lower Wednesday as fresh inflation jitters renewed concerns about higher for longer interest rates, while a plunge in Apple (NASDAQ: AAPL ) also dented sentiment on stocks. 

The Dow Jones Industrial Average fell 0.6%, 197 points, Nasdaq slumped 1.1%, and the  S&P 500 fell 0.7%

U.S. services activity surprises to upside stoking renewed inflation and Fed jitters

U.S. services activity rose more than expected in August to 54.5 from 52.7, while the prices paid  index component of the survey, a gauge of inflation, increased to 58.9 from 56.8, as strong demand for labor continued to underpin wage growth.

“We still believe that much of the pressure that fuels inflation is rooted in sticky-high unit labor costs in the service sector,” Jefferies said in a note.

Fresh signs of the inflationary pressures, pushed the odds of a November hike to nearly 50% from 38% a day earlier, according to's Fed Rate Monitor Tool .

Apple leads tech selloff as China restricts iPhone use at government agencies

Apple (NASDAQ: AAPL ) fell more than 3%, leading the selloff in tech as reports that China, a key market for the company, ordered employees at government agencies not to use foreign devices including Apple’s iPhones.

The move by China -- which has been ramping up efforts to curb the dependence on foreign technology amid national security concerns -- comes just a week ahead of the arrival of Apple’s new iPhone set to be unveiled on Sept. 12.

Roku climbs on guidance upgrade; Block slumps on UBS downgrade

Roku Inc (NASDAQ: ROKU ) upgraded its third-quarter guidance after detailing further cost cutting plans including cutting about 10% of its workforce and consolidating office space. its stock closed up nearly 3%.

The streaming media device company raised its third-quarter revenue guidance by as much as 7% to a range of $835 million to $875 million, from $815 million previously.

Payments company Block Inc (NYSE: SQ ) fell nearly 1% after UBS cut its rating on the stock to neutral from buy on concerns about a potential slowdown in margins.

Block gross profit growth will likely take a hit from a weaker consumer backdrop, while a slowdown in Cash App monthly active is expected to pressure monetization rates, {{0|UBS said as it also cut its price target on the stock to $65 from $102. 

Airlines sound alarm on higher fuel prices

Southwest Airlines Company (NYSE: LUV ) airline cut its third-quarter outlook after warning that August books were on the lower-end of its expectations at a time when higher fuel prices are expected to weigh on performance.

Southwest said it now expects Q3 revenue per available seat mile to decline between 5% and 7% from a prior estimate for a decline of 3% to 7%.

With U.S. crude prices up more than 35% since mid-year, pushing jet-fuel prices higher, other airlines including United Airlines (NASDAQ: UAL ) and Alaska Air  (NYSE: ALK ) also signaled that higher fuel prices would dent growth.

Bank of America said rising commodity prices have created “meaningful” earnings volatility for airlines this year and dampen their ability to hike prices.

Zscaler delivers quarterly earnings, guidance beat

Zscaler (NASDAQ: ZS ) fell nearly 3% despite reporting quarterly guidance and fiscal fourth-quarter results that topped Wall Street estimates, underpinned by ongoing cyber security demand. 

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