Stock Market Today: Another Apple Stock Slump Drags on Nasdaq

(Image credit: Brent Lewin/Bloomberg via Getty Images)

published 7 September 2023

Stocks opened lower Thursday after an unwelcome update on the labor market. Two of the three main benchmarks stayed in negative territory through the close as mega-cap tech titan Apple (AAPL) extended its recent slump.

However, one name managed to muscle into positive territory, as chipmaker Intel (INTC) extended its longest win streak in years.

Ahead of the bell, the Labor Department said initial jobless claims unexpectedly declined last week, falling by 16,000 to 216,000 – the lowest level since mid-February. This was the fourth consecutive week unemployment claims have dropped. Continuing claims also tumbled, by 40,000 to 1.68 million.

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"We've seen this movie before: Weekly jobless claims once again surprise to the downside, underscoring the labor market's resilience," says Mike Loewengart, head of model portfolio construction at Morgan Stanley. "Employment continues to be a thorn in the side of the Fed, which has made softening the jobs market the cornerstone of its inflation battle."

While the Fed is likely to keep interest rates unchanged at its upcoming meeting, the central bank is "nowhere close to backing away from a higher-for-longer stance," Loewengart adds.

Apple slump continues, C3.ai sells off after earnings

In single-stock news, Apple continued its recent decline, slumping 2.9% after a Bloomberg News report suggested China could widen its ban of iPhones to include state-owned companies and government-backed agencies. AAPL stock is now down more than 6% for the week.

Elsewhere, C3.ai (AI) stock plunged 12.2% after earnings. In its fiscal first quarter, the enterprise artificial intelligence (AI) software provider reported a loss of 9 cents per share on revenue of $72.4 million. Both figures beat expectations, as did C3.ai's fiscal Q2 revenue guidance. However, C3.ai's gross margin of 68.6% missed analysts' estimates as the company ramped up artificial intelligence investments.

Despite today's earnings reaction, Wedbush Securities analyst Daniel Ives says C3.ai "is well-positioned to grab a significant portion of the generative AI market" through its partnerships and enterprise AI applications. And the company's "near-term pain" will eventually translate into "long-term gain," Ives adds.

The analyst has an Outperform (Buy) rating on C3.ai and a price target of $42, representing implied upside of more than 50% to current levels.

At the close, the rate-sensitive Nasdaq Composite was down 0.9% at 13,748 – its fourth straight loss – while the S&P 500 was off 0.3% at 4,451. The Dow Jones Industrial Average managed to add 0.2% to 34,500 on strength in Intel. The semiconductor stock jumped 3.2% to close higher for a ninth straight day, marking its longest daily win streak since December 2020.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.