Stocks little changed on Wall Street; Apple slides

Story Topics
Question of the Day

What has been the biggest debacle on Obama's watch?

View results

NEW YORK (AP) — Apple on Monday held down the Standard & Poor’s 500, pushing it further below the five-year high it reached last week, after the technology giant’s stock sank following a report that demand for the iPhone 5 may be weaker than expected. The Dow Jones industrial average edged higher.

The Dow rose 18.89 points to 13,507.32, having fallen as much as 29 points at the start of the day. The S&P 500 fell 1.37 point to 1,470.68. The Nasdaq composite index fell 8.13 points to 3,117.50.

The S&P 500 closed at a five-year high of 1,472 on Thursday, following a solid start to the fourth-quarter earnings reporting period and amid optimism that the outlook for global growth is brightening.

Apple’s stock, which isn’t included in the Dow but accounts for 10.3 percent of the Nasdaq index and 3.7 percent of the S&P, slid $18.55 to $501.75 after The Wall Street Journal reported that the company has reduced its orders for iPhone 5 components because of weak demand. Apple slipped below $500 a share for the first time in nearly a year in early trading. The stock has slumped 28 percent since closing at a record $702.10 in September.

Computer maker Dell surged $1.41, or 13 percent, to $12.29 following a report that it’s in talks with buyout firms. The company is considering going private with at least two firms, Bloomberg news reported, citing unidentified sources.

Earnings reporting will pick up this week with many big U.S. banks — including JPMorgan Chase, Citigroup and Bank of America — releasing results.

“The market is definitely in wait and see mode,” said Brian Gendreau, a market strategist at Cetera Financial Group.

Investors will be scrutinizing revenues to assess whether the drawn-out debate over the “fiscal cliff” had an impact on consumer spending. A series of tax increases and spending cuts due to come into effect Jan. 1 were  averted only by a last-minute deal.

Earnings growth likely has peaked for now because companies have been relying on cost-cutting, rather than growth, to boost profitability, says Ron Sloan, a senior portfolio manager at Invesco. Analysts currently forecast that fourth-quarter 2012 earnings for S&P 500 companies will increase 3.3 percent, according to S&P Capital IQ. That figure compares with 8.4 percent from the same period a year earlier.

“We have to make this transition … from depending on margins and cost-cutting to an old-fashioned, animal spirits, industrial recovery where companies are willing to spend money to hire people,” Mr. Sloan said.

Charles Evans, president of the Federal Reserve Bank of Chicago and an alternate member of the Fed’s Open Market Committee, said Monday in a speech in Hong Kong that central banks should help create conditions to foster “robust demand growth” as the U.S. and other advanced economies try to reduce debt.

President Obama is urging Congress to increase the nation’s borrowing limit so it can continue paying its bills. The government has hit its $16.4 trillion debt limit and is expected to run out of ways to meet all of its obligations around March 1, perhaps earlier. Republicans wants spending cuts in exchange for raising the debt ceiling.

Failure to lift the borrowing limit, or debt ceiling, would be “a self-inflicted wound” to the economy and cause turmoil on financial markets, Mr. Obama told a White House news conference on Monday.

The yield on the 10-year Treasury note, which moves inversely to its price, was little changed at 1.86 percent.

Among other stocks making big moves:

Story Continues →

View Entire Story

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments
blog comments powered by Disqus
TWT Video Picks