Stocks were higher for most of the session Wednesday, but sank in the afternoon after Federal Reserve Chairman Jay Powell said in a press conference that he believes low inflation data may be "transitory." The Dow Jones Industrial Average (^DJI 0.29%) and the S&P 500 (^GSPC 0.62%) fell on a broad-based decline.
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As for individual stocks, Apple (AAPL 0.56%) pleased investors with its latest quarterly results, and U.S. marijuana retailer Curaleaf Holdings (CURLF -0.78%) announced it's buying the country's leading pot wholesaler.
Apple grows services revenue, sees improvement in China
Apple reported declines in sales and profit for the second straight quarter, but the results were better than expected and the company's outlook cheered investors, who bid the stock up 4.9%. Net sales in fiscal Q2 fell 5.1% to $58 billion and earnings per share dropped 9.9% to $2.46. Analysts were expecting EPS of $2.36 and sales of $57.4 billion.
iPhone sales fell 17%, but the company had strong growth in its high-margin services business, which grew 16%. Sales of wearables increased nearly 50%. The iPad lineup, which has been revived with new product offerings, saw sales growth of 22%. Mac sales fell 5%. Revenue guidance for Q3 was about 3% above expectations.
Analysts on the conference call were particularly interested in positive comments in prepared remarks about Apple's business in China. Weakness in sales there was a major factor in the company's downward revision of guidance in January, but the effect of price cuts and new trade-in and financing programs has the tech titan believing the worst is behind it. Sales in China fell 22% in Q2, but CEO Tim Cook said they improved the last weeks of the quarter.
Curaleaf buys pot wholesaler in a billion-dollar deal
Marijuana dispensary operator Curaleaf Holdings announced it is acquiring the cannabis business of privately held Cura Partners in an all-stock transaction, and shares of Curaleaf hit new highs, closing up 12%. Cura Partners owns the Select brand, the most well-known cannabis wholesale brand in the country, according to Curaleaf's press release.
Curaleaf will issue 95.6 million shares in the related-party transaction, valued at $949 million as of yesterday's stock price. The deal includes a provision for Cura shareholders to earn an additional $200 million in shares if certain revenue targets are achieved in 2020.
Massachusetts-based Curaleaf is a vertically integrated operator of 44 marijuana dispensaries in 12 states -- currently the largest footprint in the industry and focused mostly in the East. Cura is based in Portland, Oregon. Its Select brand is the leading brand by market share in California, Oregon, and Nevada and is distributed to over 900 stores. The combined company had $205 million in pro forma revenue in 2018, up from $65 million the prior year.