“Stocks were weakening in the final hour of trading Tuesday amid mixed headlines from Europe that set signs of economic strength in Germany against the failure of Greek political leaders to form a new government,” Andrea Tse reports for The Street. “The Dow Jones Industrial Average was down 69 points, or 0.55%, at 12,626. The S&P 500 was losing 8 points, or 0.59%, at 1330, and the Nasdaq was off 9 points, or 0.30%, at 2894. May has been a dismal month so far for the major U.S. equity indices with the Dow falling in eight of the past nine sessions, losing more than 4% after a modest rally on May 1. Both the S&P 500 and Nasdaq are off similar amounts since that time. Tuesday’s volumes were running light with 3.2 billion shares changing hands on the the New York Stock Exchange and trading on the Nasdaq just above 1.4 billion.”
“Stocks tumbled Monday on Greece’s inability to break a political impasse fueled speculation the country may eventually have to leave the eurozone and destabilize the entire continent,” Tse reports. “The impact of this development — not exactly a stunner given the disarray that’s been evident in Greece since the elections less than 10 days ago — was being mitigated by a much stronger-than-expected German gross domestic product report. The eurozone’s leading economy posted preliminary, seasonally adjusted, first-quarter GDP growth of 0.5%, compared with a contraction of 0.2% in the fourth quarter. The performance beat even the highest estimate for growth of 0.2% among economists polled by Thomson Reuters. On a year-over-year basis, Germany’s economy expanded 1.7% in the first quarter from 1.5% in the fourth quarter.”
Tse reports, “In U.S. economic news, the Labor Department’s April consumer price index was unchanged in April, as expected, after rising 0.3% in March. The core number, which excludes volatile food and energy items, rose 0.2%, also meeting the consensus view, after rising 0.2% in March. The Commerce Department said that retail sales rose 0.1% in April, slightly below estimates of 0.2% growth after an advancement of 0.7% in March.”
“Apple shares were losing nearly 1%, sitting near their lows of the session. Sterne Agee saying it believes iPhone expectations for the next two quarters are too high,” Tse reports. “‘Based on our supply chain work, we believe significant iPhone upside over the next two quarters is less likely based on reduced supplier build plans,’ wrote analyst Shaw Wu, who has a buy rating and $780 price target on the stock. ‘Conversely, the likelihood of iPad upside appears higher due to additional screen supply.’ The shares were off $5.37 to $552.85 in late trades.”
Read more in the full article here.
Yeah, their expectations for sales are always too high until Apple comes in at earnings with even higher than imagined sales.
You do realize that Apple’s last quarter earnings blowout has already evaporated from Apple’s share price despite higher than imagined iPhone sales. Even if the analysts decide to try to pump up Apple further, shareholders are basically flying with a deflating balloon. This is something that can’t be blamed on analysts alone. All target prices have been raised for Apple, but investors are going for other stocks like Google, Amazon, Priceline, Intuitive Surgical, etc. There’s likely to be a lot of money pouring into Facebook, too, which is supposed to make everyone rich.
Over time this selloff will look small but we may have dead money for several quarters!
Additionally, the street was not happy as there have been no new product releases …….
iPhone 4S is same as 4 and new iPad is same as 2 with some software and of course the retina screen upgrade but most don’t see those things as huge upgrade …….
I think Facebook is great. As a user I use it at least a half-dozen times a day, and as an advertiser I can see a lot if value in the sponsored content model (not as hot on the display ads).
Still, if the IPO lands the valuation around $100 billion, it’s hard to see an up-side in the near-term. I just don’t see them radically increasing their revenue for some time.
Good time to buy. I have invested in Apple for the long term and this is another golden opportunity to buy. Naysayers will think otherwise but I feel every time the price drops, I will buy some more shares.
As for Fakebook, where’s the value? What’s the REAL product? So far, all I am seeing is a me-too dynamic, copying Apple, Google and others. The Z-man isn’t brilliant and definitely does not know how to keep it simple. IMHO, all the recent acquisitions are to add to an empty balance sheet.
I’ll stick with the fruit company from Cupertino. I like the flavour.
Cheers.
Soon there will be “flight to quality.”