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Apple Whiffs on Earnings, but Avoids Tumbling Off Cliff

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Today's financial recap and tomorrow's financial outlook.

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MINYANVILLE ORIGINAL It was a very slow day today that the bulls attempted to take control of at the start, but by late morning they had already lost the initiative. Pre-market, S&P futures rose as much as 10 points and continued this rally under Pending Home Sales data at 10:00 a.m. After that, the bears took the driver's seat and pushed the S&P down to slightly negative territory. The day finished up around the flat line, but it certainly marks another victory for the bears.

Initial jobless claims data showed a small decline to 369,000 from last week's 392,000, but this was relatively in line with the 4-week average of 368,000. Durable goods orders showed a sharp snapback to a monthly gain of 9.9%, mostly due to a large increase in aircraft orders that had been put on hold last month. However, all of the economic data that was reported this morning reflected a negative revision of the prior month's data.

Apple (Nasdaq:AAPL) reported earnings after the close of $8.67 vs $8.75 estimates. Revenues slightly beat at $35.97 billion vs $35.82 billion estimates. However, forward guidance was dramatically lower, causing an initial plunge in the stock as much as 7% before recovering to nearly unchanged during after-hours trading. Earlier in the trading day, it was also reported that Apple would seek a new Internet radio service in 2013, with an announcement as early as mid-November 2012. Internet radio provider Pandora (Nasdaq:P) got slaughtered in immediate trading after the announcement, twice tripping volatility circuit breakers on the NYSE.

Fixed-income continued to distance itself from equities. Since October 17, the S&P 500 has fallen by 50 points (3.5%), but the 10-year Treasury yield has risen by one basis point. Continued bond and equity weakness is highly negative.

Tomorrow's Financial Outlook

The US will report the first estimate of 3Q GDP tomorrow morning, including the core PCE figure, which is the measure the Federal Reserve uses to calculate inflation. Economists are expecting a rise from 1.3% last quarter to 1.8%. Personal Consumption is expected to rise to 2.0% from 1.5%.

In Europe, the German GfK Institute will report consumer confidence.

In terms of earnings, Legg Mason (NYSE:LM), First Solar (NASDAQ:FSLR), and Weyerhaeuser (NYSE:WY) will report.

Twitter: @Minyanville

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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