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Wall Street Hurt By Apple's Disappointment


Wall Street, which received a nice earnings lift recently from overbought levels, may face threat to its momentum from Apple's (AAPL) disappointing revenues. The U.S. index futures point to a mixed opening on Thursday. The markets also get to digest more earnings news from blue chips such as 3M Co. (MMM). The jobless claims data due to be released before the markets open could also have an impact on the markets. Earlier in the day, manufacturing data from China and the eurozone brought in cheer among traders, keeping intact the momentum of the markets in these regions.

As of 6:30 pm ET, the Dow futures are adding 7 points, while the S&P 500 futures are slipping 3.20 points and the Nasdaq 100 futures are declining 36 points.

U.S. stocks continued its uptrend on Wednesday, courtesy some solid earnings reports.

On the economic front, the Labor Department is scheduled to release its jobless claims report for the week ended January 19th at 8:30 am ET. The consensus expectations call for an increase in claims to 360,000 for the week from 335,000 in the previous week.

The Conference Board will release its leading economic indicators index for December at 10 am ET. Economists expect the index to rise by 0.4 percent compared to a 0.2 percent drop in the previous month.

The Energy Information Administration is set to release its oil inventory report for the week ended January 18th at 11 am ET. Around the same time, the Kansas City Federal Reserve is scheduled to release the results of its manufacturing survey. The index measuring manufacturing activity in the region is expected to improve to 2 in January from -2 in December.

In corporate news, Apple (AAPL) reported first quarter earnings of $13.81 per share compare to $13.87 per share in the year-ago quarter. Revenues rose to $54.5 billion from $46.3 billion last year. The earnings beat estimates, while the revenues trailed expectations. For the second quarter, the company expects revenues of $41 billion to $43 billion, which is below the $45.63 billion consensus estimate.

Logitech (LOGI) reported a third quarter loss of $1.24 per share compared to a profit of 32 cents per share last year. Sales fell 14 percent to $715 million, missing the consensus estimate. Western Digital (WDC) reported second quarter non-GAAP earnings of $2.09 per share on revenues of $2 billion. The results exceeded estimates. Altera Corp.'s (ALTR) fourth quarter results were below estimates. The company also said it expects a 4-8 percent sequential decline in sales.

Amgen (AMGN) reported fourth quarter adjusted earnings of $1.40 per share, up 16 percent, while its revenues rose 11 percent to $4.42 billion. For 2013, the company expects adjusted earnings of $6.85 to $7.15 per share on revenues of $17.8 billion to $18.2 billion. The results exceeded estimates, while the guidance was positive as well.

AT&T (T), Con Edison (ED), E*TRADE (ETFC), Flextronics (FLEX), JB Hunt (JBHT), Juniper Networks (JNPR), Maxim Integrated (MXIM), Microsemi (MSCC), Microsoft (MSFT), Qlogic (QLGC), Rambus (RMBS), Starbucks (SBUX), Verisign (VRSN) and WMS Industries (WMS) are among the notable companies due to report after the close of trading.

Asian stocks were mixed yet again despite the positive lead from Wall Street overnight, a positive Chinese manufacturing data and the yen's weakness. The Japanese, Australian, New Zealand and Singaporean markets closed higher, while the rest of the major markets retreated.

Japan's Nikkei 225 average ended up 133.88 points or 1.28 percent. Australia's All Ordinaries also towed in line with the mood in Tokyo and closed higher for the seventh straight session. The index closed up 21.70 points or 0.45 percent, its lowest closing level since May 11, 2011. Hong Kong's Hang Seng closed at 23,599, down 36.20 points or 0.15 percent.

A report released by Japan's Ministry of Finance showed that Japan recorded a trade deficit of 641.5 billion yen, wider than the 522.8 billion yen shortfall expected by economists. Meanwhile, Markit's survey showed that China's manufacturing sector saw an improvement in activity in January. The purchasing managers' index rose to 51.9 in January from 51.5 in December.

After seeing some volatility in early trading, the major European markets are currently higher, as traders digested manufacturing data from the region and Apple's revenue miss. Technology stocks are seeing marked weakness, while financial stocks are also moving to the downside.

In corporate news, Commerzbank announced that it plans to eliminate 4,000 to 6,000 jobs by 2016, as it strives to cut costs and achieve its profit objective. Irish low cost carrier easyJet reported a 9 percent increase in its first quarter sales to 833 billion pounds. For the first half, the company estimates a pre-tax loss of 50 million pounds to 75 million pounds.

The London Stock Exchange reported a 6 percent increase in its December quarter profit to 209 million pounds, helped by better performance by its data business.

On the economic front, the results of a preliminary survey by Markit showed that the eurozone's private sector continued to contract in January, although at a pace slower than a month-ago. The composite purchasing managers' index reflecting activity in the manufacturing and the services sector rose to 48.2 in January from 47.2 in December.

by RTTNews Staff Writer

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