Wednesday, 22 July 2015 21:29
NEW YORK: A 4.9 percent plunge by Apple following a disappointing earnings report led US stocks lower in early trade Wednesday.
About 40 minutes into trade, the tech-rich Nasdaq Composite Index was at 5,174.75, down 33.37 points (0.64 percent).
The Dow Jones Industrial Average shed 21.62 (0.12 percent) to 17,897.67, while the broad-based S&P 500 fell lost 3.04 (0.14 percent) at 2,116.17.
Apple tumbled despite reporting that net income for the quarter ending June 27 jumped 38 percent to $ 10.7 billion.
Traders focused on the tech giant’s forecast of $ 49-$ 51 billion in sales for the current quarter, slightly below the $ 51.14 billion projected by analysts. Some analysts also expected higher iPhone sales, which dropped 22 percent from the second quarter to 47.5 million units.
Deutsche Bank said Apple’s results showed “it’s getting harder to beat the bulls.”
Briefing.com analyst Patrick O’Hare pointed out that Apple shares had run up 9 percent since July 9, ahead of the earnings release.
Apple “couldn’t possibly satisfy the rising tide of bullish expectations,” O’Hare said.
Microsoft fell 1.6 percent following a loss of $ 3.19 billion due to a hefty write down on the smartphone business it acquired from Nokia and restructuring charges of nearly a billion dollars.
Yahoo fell 1.8 percent after reporting a $ 22 million loss in the second quarter as chief executive Marissa Mayer warned earnings could be pressured in the coming quarter due to heavy investment in new products.
Aerospace giant Boeing rose 1.8 percent after second-quarter earnings translated into $ 1.62 per share, 25 cents above analyst expectations.
Coca-Cola advanced 0.4 percent as net income for the second quarter rose 19.8 percent to $ 3.1 billion. The soda maker notched global growth of two percent in beverage volumes.
Other companies to report earnings included Chipotle Mexican Grill (+7.5 percent), GoPro (-1.7 percent) and Whirlpool (+7.2 percent).
Bond prices rose. The yield on the 10-year US Treasury fell to 2.33 percent from 2.34 percent Tuesday, while the 30-year declined to 3.06 percent from 3.08 percent. Bond prices and yields move inversely.
