Apple stocks take a bite out of US markets

THE S&P 500 and Nasdaq ended lower yesterday as worries over demand for Apple products drove down its shares and as investors braced for earnings disappointments.

But Dell’s stock jumped 13 per cent to about a five-month high at $12.29, offsetting some of the tech-sector weakness, after Bloomberg reported the number three personal computer maker is in talks with private equity firms to go private.

Tech heavyweight Apple lost 3.6 per cent to $501.75 and was the biggest weight on both the S&P 500 and Nasdaq 100 indexes after reports that the company has cut orders for LCD screens and other parts for the iPhone 5 this quarter due to weak demand. The stock earlier hit a session low of $498.51, the first dip below $500 since 16 February.

“With Apple, it seems as if the sentiment has shifted from this being the one stock that everybody wanted to own to people beginning to look at it as a company (whose) business is slowing down somewhat,” said Eric Kuby of North Star Investment Management Corp in Chicago.

Fourth-quarter earnings kick into high gear this week. Analyst estimates for the quarter have fallen sharply since October, with S&P 500 earnings growth now seen up just 1.9 per cent from a year ago, Thomson Reuters data showed.

The Dow Jones industrial average was up 18.89 points, or 0.14 per cent, at 13,507.32. The Standard & Poor’s 500 Index was down 1.37 points, or 0.09 per cent, at 1,470.68. The Nasdaq Composite Index was down 8.13 points, or 0.26 per cent, at 3,117.50.

Apple suppliers also lost ground, with Cirrus Logic off 9.4 per cent at $28.62 and Qualcomm down 1 per cent at $64.24.

The Dow fared better than the other two indexes, helped in part by Hewlett-Packard shares, which rose 4.9 per cent to $16.95. The stock, which was up early in the session after JP Morgan upgraded its rating on the stock and raised its price target to $21 from $15, added to gains after the Dell report.

Appliance and electronics retailer Hhgregg slumped 5.7 per cent to $7.44 after the company cut its same-store sales forecast for the full year.

Earnings reports are due this week from Goldman Sachs, Bank of America, Intel and General Electric, among other companies. Third-quarter reports ended with a gain of just 0.1 percent, the worst for an S&P 500 profit period in three years, according to Thomson Reuters data.

President Barack Obama warned Congress yesterday that a refusal to raise the US debt ceiling next month could mean a government shutdown and trigger economic chaos.

Volume was roughly 5.6bn shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45bn.