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Pre-Market: Apple Profit Margins Shrink; Retail Sales Unexpectedly Fall


But Apple CEO Tim Cook promised that it's "going to be an iPad Christmas."

Stock futures were slightly higher today, but some troubling economic data could worry investors as the Fed begins its monthly meeting.

Dow (INDEXDJX:.DJI) futures were up 0.09% at 15,532 and contracts on the S&P 500 (INDEXSP:.INX) rose 0.10% to 1,760.50. Nasdaq (INDEXNASDAQ:.IXIC) futures gained 0.07% to 3,355.50.

A bevy of economic datapoints comes out today as the Federal Reserve begins its two-day policy meeting. Retail sales slumped in September. While economists expected sales to be flat after rising 0.2% in August, actual retail sales fell 0.1% from the month before. Excluding autos and gas, sales increased 0.4%. Producer prices fell 0.1% last month.

Still to come is the August S&P/Case-Shiller Home Price Index, which is likely to show a 0.7% monthly increase in prices in the 20 cities that it tracks. Home prices were likely 12.4% higher than a year ago. Also later this morning is this month's consumer confidence numbers, which are expected to fall to 75 from 79.7 last month as the government shutdown and furloughs probably weighed on economic sentiment.

The results of the FOMC meeting will be announced tomorrow afternoon. Market watchers are expecting the Fed to hold off on reducing its monthly bond buying this month as employment indicators are still weak.

Apple (NASDAQ:AAPL) shares are up just slightly this morning after the company reported that earnings in the previous quarter were lower than a year ago. EPS fell by $0.41 to $8.26, but revenue rose 4% to $37.5 billion. Mac sales fell to 4.6 million from 4.9 million. Two new iPhone models pushed handset sales to 33.8 million, up from 26.9 million in 2012. The decline in margin is mostly attributed to competition from other Apple products, such as the iPad Mini, which has a lower margin than the bigger iPad. Overall iPad revenue fell 13% from a year ago. CEO Tim Cook promised on the earnings call that this holiday season is "going to be an iPad Christmas" thanks to the recent introduction of new models.

Pfizer Inc (NYSE:PFE) earnings fell by 19% in the last quarter. The pharmaceutical giant, still reeling from the loss of exclusivity for Lipitor, saw profit fall to $0.39 per share from $0.43 per share last year. The company reduced its earnings guidance for the year by $0.05 to $2.15 per share.

Herbalife (NYSE:HLF), the multi-level marketer, beat earnings expectations yesterday with earnings of $1.41 per share and $1.21 billion in revenue.

At the close of the trading day, LinkedIn (NYSE:LNKD), Yelp (NASDAQ:YELP), and Groupon (NASDAQ:GRPN) will all report earnings.

Michael Kors Holdings Ltd. (NYSE:KORS) rallied 2.7% this morning on news that it will join the S&P 500 after Friday's close.

Twitter: @vincent_trivett
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