Stocks On Wall Street Drift Lower, Apple Earnings Fall on Flat Sales

Nichole Harper
24 Jul, 2013
New York City

Market indexes in New York and in Europe drifted lower as investors digested U.S. new home sales and European manufacturing survey data. A private survey also showed weakening conditions in manufacturing. Apple reported flat sales and a decline yet healthy earnings in the fiscal third quarter.

[R]1:35 PM New York – Market indexes in New York and in Europe drifted lower as investors digested U.S. new home sales and European manufacturing survey data. A private survey also showed weakening conditions in manufacturing. Apple reported flat sales and a decline yet healthy earnings in the fiscal third quarter.[/R]

Market indexes in New York opened higher but failed to sustain the advance and steadily drifted to losses despite Apple, EMC, VMWare, Ford and Eli Lilly reporting better than expected earnings.

The S&P 500 index declined 0.4% and the Nasdaq Composite Index fell 0.09%.

June New Home Sales Rises 8.3%

New home sales in June increased 8.3% to annual rate of 497,000 homes, the highest level since May 2008 when the housing market collapse was at its worst.

The latest data from the Commerce Department in Washington was ahead of 485,000, what many economists had expected. May new home sales estimate was revised down to 459,000 from the previous estimate of 476,000.

The sale increased 38.1% from a year ago month, the largest monthly increase in home sales since January 1992.

The median selling prices for a new home increased 7.4% to $249,000 from $232,600 in the same month a year ago.

The number of new home for sale increased to 161,000 in June from 159,000 in May and at current sales rate increased to 3.9 months.

Earlier in the week, industry association said existing home sales unexpectedly declined 1.2% to 5.08 million annual rate in June.

European Markets

Euro zone private sector expanded for the first time in more than a year according to an independent survey conducted by Markit.

The Eurozone Composite PMI increased to 50.4, the first expansion since January 2012.

Market indexes in London gained 0.3% and in Frankfurt advanced 0.8% and in Paris added 1%.

Asian Markets

Asian markets closed and market indexes in Japan, Singapore and in Australian eased after the latest read on manufacturing showed a decline larger than expected according to a private survey.

The overall PMI index in China for business conditions declined to 47.7 from the revised June reading of 48.2. The third monthly decline in the index is also the weakest since August 2012.

The employment sub-index decreased to 47.3, the weakest since the depth of global financial crisis.

Market indexes in Hong Kong gained 0.2%, in Shanghai declined 0.7%, in Tokyo decreased 0.3%, and in Jakarta dropped 1.8% and in Seoul fell 0.4%.

The Sensex index in Mumbai declined 0.4% after rising for five days in a row after the Reserve Bank of India took additional steps to support rupee and lowered the overall daily borrowing limits for banks.

Stocks in Review

Apple Inc ((AAPL)) increased 6% after the maker of popular wireless gadgets reported flat earnings and earnings fell compared to a year ago.

The stock has fallen 37% from its peak on September 19 and the company is expected to release newer versions of iPhone and iPad later in the year.

AT&T Inc ((T)) dropped 2% after the largest wireless carrier reported earnings that fell short of expectations on higher smart phone discounts.

Broadcom ((BRCM)) plunged 15% after the maker of wireless communication chips estimated lower than expected revenues in the current quarter.

Caterpillar ((CAT)) declined 1.5% after the mining and construction machinery maker lowered its annual earnings outlook and mining equipment sales declined for the third quarter in a row.

EMC Corp ((EMC)) jumped 6% after the largest maker of electronic storage systems reported second-quarter earnings and sales that matched analysts’ expectations and said it plans to buy back $3.5 billion of shares in the next one year.