Celebrating 25 Years of Scoop
Special: Up To 25% Off Scoop Pro Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


While you were sleeping: Apple slides on outlook

While you were sleeping: Apple slides on outlook

Oct. 27 (BusinessDesk) - Equities slid amid a disappointing outlook from Apple, while energy stocks fell with the price of oil.

In 2.14pm trading in New York, the Dow Jones Industrial Average eked out a 0.03 percent advance. The Nasdaq Composite Index dropped 0.7 percent. In 2pm trading, the Standard & Poor’s 500 Index fell 0.3 percent.

In the Dow gains in shares of Boeing and those of Nike, recently trading 4.2 percent and 1.9 percent higher respectively, offset slides in shares of Apple and those of Merck, down 3 percent and 2.2 percent respectively.

While Apple’s latest quarterly earnings per share exceeded analysts expectations, analysts were disappointed with its outlook for iPhone sales—especially given the rival Samsung’s woes.

"In essence, in China and elsewhere, while Apple’s products are still seen favourably, the distance between Apple and its competitors is nowhere near as great as it once was," Neil Saunders, head of retail research firm Conlumino, wrote in a note, according to Reuters.

The latest US economic data were better than anticipated. The US trade deficit shrank 5.2 percent to US$56.1 billion in September, bolstering hope that third-quarter GDP growth might beat expectations.

“We now believe the boost from trade could be closer to a full percentage point, almost twice what we had expected," Michelle Girard, chief economist at RBS in Stamford, Connecticut, told Reuters. Girard said she now predicts real GDP growth in the third quarter of 3.3 percent.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

Separately, a Commerce Department report showed new home sales rose 3.1 percent to a seasonally adjusted annual rate of 593,000 units in September, an unexpected gain.

Mondelez International shares climbed, up 3.6 percent as of 1.35pm in New York, after the maker of Cadbury chocolate upgraded its full-year profit forecast.

The company has increased its full-year adjusted earnings per share outlook and now expects growth of about 25 percent on a constant-currency basis, Mondelez said in a statement.

"Our third quarter results underscore our continued commitment to improve operational efficiency, expand margins and profitably grow volume while also investing in strategic growth initiatives for the longer term," CEO Irene Rosenfeld said in the statement.

“In the face of challenging market conditions, we're building a stronger, more streamlined company that is well positioned to deliver sustainable, profitable growth and attractive cash generation,” Rosenfeld noted.

In Europe, the Stoxx 600 Index finished the day with a 0.4 percent slide from the previous close. France’s CAC 40 Index slipped 0.1 percent, Germany’s DAX Index declined 0.4 percent lower, while the UK’s FTSE 100 Index shed 0.9 percent.

Germany’s Bayer, which agreed to buy Monsanto in a US$66 billion deal, reported better-than-expected quarterly profit bolstered by its pharmaceutical unit.

Even so, Bayer shares closed 1.4 percent lower in Frankfurt as investors were concerned about weakness in its Crop Science division.

Pharmaceuticals posted “encouraging” sales growth of 7.6 percent in the quarter, Consumer Health sales grew 3.6 percent, while sales of Crop Science were level year on year, Bayer said.

“Earnings are not strong enough to fuel markets,” Ralf Zimmermann, an equity strategist at Bankhaus Lampe in Dusseldorf, Germany, told Bloomberg. “Some investors who had expected accelerating earnings may be disappointed.”


© Scoop Media

Advertisement - scroll to continue reading
Business Headlines | Sci-Tech Headlines


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.