Apple's sales 'miss,' European worries hurt stocks

The major averages all slip; the Dow loses 21. Apple slides when it reports weekend sales of 5 million iPhones, less than expected. Caterpillar warns about 2015 earnings. Facebook drops as Barron's says the shares may have further to fall.

By Charley Blaine Sep 24, 2012 12:44PM
Charley BlaineUpdated: 6:50 p.m. ET

Stocks ended lower today, and it was a struggle from the open.

Europe was a problem after a measure of German business confidence tumbled today and disagreements on banking reform and the pace of new austerity measures in Greece and Spain grew. European stocks ended lower, and the U.S. dollar rose against the euro. Moreover, gold (-GC) and crude oil (-CL) moved lower.

Apple (AAPL) was a problem after reporting it sold some 5 million iPhones over the weekend. By most measures, it was a great weekend, but the sales were less than Wall Street had expected. And Facebook (FB) was sharply lower after a Barron's article over the weekend suggested the shares were worth maybe $15. But Google (GOOG) shares burst to a new intraday high of $750.04 before slipping back to $749.38, a new closing high.

After the close, construction equipment maker Caterpillar (CAT) cut its 2015 earnings forecast to $12 to $18 a share from earlier guidance of $15 to $20. The guidance assumed no worldwide recession and continued modest economic growth. Shares were down $2.12 to $88.75 after falling 85 cents to $90.87 in regular trading.

The Dow Jones Industrial Average ($INDU) closed down 21 points to 13,559, its first two-day loss since Aug. 27-28. The Standard & Poor's 500 Index ($INX) was off 3 points to 1,457, its first three-day loss since the end of July. The Nasdaq Composite Index ($COMPX) was off 19 points to 3,161. The Nasdaq-100 Index ($NDX) was off 18 points to 2,844.

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Despite the market's struggles today, the major indexes remain poised to finish higher for the fourth straight month. The Dow has had just one down month over the past 12, something not seen since March 1958 through February 1959. And stocks look to finish with a solid, though not spectacular, third-quarter performance.

Futures trading suggests a flat open for stocks on Tuesday. The Standard & Poor's/Case-Shiller Index for July will be released before the open. Also due will be the Conference Board's report on consumer confidence for September and the Federal Housing Finance Agency's home-price index report for July.

Earnings are due from Jabil Circuit (JBL) and Vail Associates (MTN).

Commodities fall on European worries
Thanks to Europe, crude oil in New York settled down 96 cents to $91.93 a barrel, its lowest level since Aug. 3. Brent crude was down $1.64 to $109.78. It has been trading for several days at levels last seen in early August.

The national average price of gasoline was $3.808 a gallon, its lowest level since Aug. 29, according to AAA's Daily Fuel Gauge Report.

Gold, meanwhile, settled down $13.40 to $1,764.60 an ounce. It hit a near-term closing high of $1,772.70 on Sept. 14 as markets reacted to the Federal Reserve's decision to buy up to $40 billion a month in mortgage-backed securities in an open-ended bid to stimulate the economy.

The 10-year Treasury yield fell to 1.72% from Friday's 1.76%.

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Apple shares drop as iPhone sales come up short
Apple shares fell $9.30 to $690.79. The problem for investors: There was so much excitement over the iPhone 5 before its release that some analysts predicted sales of 8 million units or so. Didn't happen.

Apple said today the sales over the weekend were about 5 million, something it has never done before. Phones were sold out in many stores, and many customers had to content themselves with ordering the device. The question is whether Apple underestimated demand  or simply kept production at relatively low levels so that the perceived shortage would cause even more frenzy.

The question gets more complicated by reports of a riot involving some 2,000 workers at a Foxconn factory in northern China. The factory is believed to be one of the plants Foxconn uses to assemble iPhones. (Apple subcontracts all of its manufacturing.) It's not clear if the riot caused damage to the factory or if it will hurt iPhone production.

Apple was the biggest factor in the declines for the Nasdaq and Nasdaq-100.

Also lower were shares of companies that make components used in the iPhone. Cirrus Logic (CRUS) was off $1.78 to $40.18. Skyworks Solutions (SWKS) was off 77 cents to $24.03. Broadcom (BRCM) fell 60 cents to $35.64. Avago Technologies (AVGO) was off 91 cents to $34.60. Qualcomm (QCOM) dropped 60 cents to $63.67.

Google, meanwhile, benefited from its strong position in search and the success of mobile phones using its Android operating system.

Wall Street doesn't care about Lennar's earnings beat
Homebuilding shares were lower despite boffo earnings reported by Lennar (LEN).

Lennar said it earned $87.1 million, or 40 cents a share, in the fiscal third quarter, up from $20.7 million or 11 cents a year ago. Revenue was up 34.1% to $1.1 billion.

But the shares fell 55 cents to $36.96. They had dropped to as low as $36.04 in the midafternoon. Despite the fall, the shares are still up 88% this year.

Also falling: Ryland (RYL), down 68 cents to $32.14; D.R. Horton (DHI), down 33 cents to $22.04; MDC Holdings (MDC), off 21 cents to $39.94, PulteGroup (PHM), down 22 cents to $16.76, and KB Home (KBH), down 63 cents to $14.63.

Profit-taking seems to have kicked in. The homebuilding sector has been one of the best performers as evidence of a recovery in housing is starting to take hold. 

Facebook slides -- again

Facebook shares were down $2.07 to $20.79 today after a weekend article in Barron's said it is "still too pricey" despite a sharp decline since its initial public offering.

Though Facebook's stock has plunged since its May IPO, Andrew Bary at Barron's said the stock trades at "high multiples of both sales and earnings, even as uncertainty about the outlook for its business grows."

At issue is the shift of Facebook's massive user base to mobile devices, where Facebook is still figuring out how to make advertising work. Bary said success in the mobile space is "no sure thing" for the company.

European disagreements, worries hit markets
Europe's problems suddenly became noisy again.

German Chancellor Angela Merkel and French President Francois Hollande disagreed on a timetable for starting joint oversight of Europe’s banking sector.

Merkel rejected Hollande’s appeal to activate oversight of the banking union, "the earlier, the better." The deadlock over regulation may delay into next year a key building block in resolving the single currency’s debt crisis.

German business confidence unexpectedly fell for the fifth straight month in September to the lowest reading since February 2010. The Ifo Institute in Munich said its business climate index, based on a survey of 7,000 executives, dropped to 101.4 from 102.3 in August. Economists had predicted an increase to 102.5.

Germany's Xetra Dax Index ($DE:DAX) was down 38 points to 7,413. Despite the decline, the index is up 5.9% in September and 15.5% for the third quarter.

Short hits from the markets -- New York close



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Sep 24, 2012 2:49PM
Does anyone care that our government (by the people and for the people) is indirectly going long into a bubble market like never before. What idiots, thinking you can buy your own debt. This is gonna' end badly.
Sep 24, 2012 2:17PM
The problem is not where he was born, it's where he lives NOW. 
Sep 24, 2012 2:27PM

People who feel they are victims and are entitled to government hand outs are ruining our country.

Oil Companies who feel entitled to $4 billion in welfare checks every year.

AG Corporations who get over $20 billion in welfare checks every year.

Millionaires who feel entitled to pay zero in federal tax every year.

Congress who feels entitled to a Federal check every month for doing nothing.

CEO's who feel entitled to million dollar bonuses while there Companies lay off workers.

Bankers who feel entitled to a bailouts after Racketeering trillions from Home Owners.

It's high time to stop the welfare and free loading by these people who consider themselves victims of our society and believe their entitled to all it's wealth.

Sep 24, 2012 4:07PM

I find all the bad news very curious. The economy, unemployment .... the deficit which  between Gov't debt and personal debt is now over $100 trillion, which makes it obvious that the U.S. is bancrupt?? Nothing new there ... but a shout out to Obama for creating this debt mess. The housing had it's worst year in decades last year, and with the Gov't BKed .... there is no more money for bailouts. Companies, banks, people want money ... sorry ... NONE LEFT.

This wll create an economic downfall which will lead to higher unemployment, which will lead to even worse housing news and with all the money that Obama is printing ... the radical inflation has already started. Gas is at it's highest price ever .... so your costs are getting higher and the money coming in is less every day.

And you wonder why I am amazed that anyone would even think about voting for Obama?? Your stupidity amazes me? Everything he has touched in the last 4 years has turned into a disaster. Oh well ... in a couple of years, if Obama is elected, and we have the perfect economic storm ... you'll be thinking the same about Obama as I think now.

Sep 24, 2012 2:54PM

Sales Miss? European worries?

No way this can be true since it's Recovery Summer version 3.12.  I just got off the phone to my pal Obama and he said that private business is doing just fine and Jim-dandy. He said don't sweat it, Bernanke is going to be cranking out all the unicorns and pixie dust we will need and then some. Woo-Whooooooo. Happy Days are here again..................

Sep 24, 2012 2:28PM
The POTUS  will be in n y c  today and tuesday to tape the VIEW with Whoopie and the other socialist  advocates
He will also go to the un to rub elbows with the other world leaders
Will he meet with Netenyahu  or the Iranian president ?
or will he throw  everyone under the bus?
Sep 24, 2012 2:20PM

Yeap, there is a big 'GROWTH' to worry in DC and it lives in the White House.

It is called OBAMACANCER and not obamacare


His Majesty prefers the company of the Woops GoGirl than the world leaders, and we must understand why...she votes for him...

Sep 24, 2012 3:19PM
When Iran War breaks out, and it will, oil will skyrocket and all else matters not...we are stuck
Sep 24, 2012 4:46PM
Who the H would even consider voting for Obuma??
Sep 24, 2012 4:41PM
Just heard Obama say on tv, that..................."Israel's requests are "Noise"..........We'll see if it is noise if war breaks out................
Sep 24, 2012 1:09PM
Up Down Up Down.......It is almost a superficial economy with no one in control and with no one that cares about the worlds future!!!!  By the end of the day this comment section will be full of pointless rants about 0bama and Romney with no solution in site.  People need to realize this isn't a entitlement society it's a privilege society!!!!!
Sep 24, 2012 2:33PM

More QE,my kingdom for more QE--make us more money Benny.  Yes,Yes Mr.President you may take the credit.

Sep 24, 2012 3:13PM
Apple ... Apple ... Apple ... is anyone else getting bored with Apple and the free publicity given it by the so called business news???
Sep 24, 2012 1:07PM
Why is this surprising, to be fair , Apple never released their demand or supply numbers, therefore how can these "analysts" predict the sales?
In other words they just pulled the millions out of thin air, in order to justify significant buys of Apple stock. Now that the numbers dont agree with their predictions theyre worried the price will come down and their fund loses money.
What a load of tosh seriously, playing with other people's hard earned money!
Sep 24, 2012 6:00PM

<<<Most people who post on this board seem to understand what it takes to put our economy right:

1) quit wasting tax dollars,

2) quit printing dollars and end the Fed (put Bernanke in Gitmo while we're at it), and

3) reinstate the Glass-Steagall Act.

So, if the average American gets it, why doesn't our governement? Either they're ALL incredibly stupid or only care about lining their pockets. >>>


Do whatever it takes to have a trade surplus should be #1. That means jobs, wealth and increased tax revenue. Don't fix that and the rest is futile.

Sep 24, 2012 1:17PM
Ask Nokia and RIM if they would like to miss that kind of sales forecast... Analysts make predictions just to justify their salary but they don't know shiit
Sep 24, 2012 7:31PM

Obambambam is doing what he does best.........LIPS SERVICE............a la Michelle the US hater......

Remember the empty chair with Clint Eastwood..........IT IS REAL....we have an EMPTY LEADERSHIP in this country......we have a perpetual campaigner and Demonizer in Chief.....Obambambam is trying to make the US an extension of the Mooselim world and for that he needs a new CONSTITUTION and he just got the signal from this A-hole Tyranian leader...exterminate Israel first, . then comes to America to exterminates all those who don't like the Obambambams. The real BUMP IN THE ROAD is living in the What House in DC with is time for road reforms....

Sep 24, 2012 4:22PM

<<<Market, down, as forecast ... just another manipulated Monday ... the 15th ... or is is 16th? This has got to stop!!!.. It is hurting honest investors, and will drive them away.. >>>

Yeah, from a stimulus pumped market.

Sep 24, 2012 2:40PM
All hands on deck, I said all hands on deck. Closing time approaches, fire up the QE pumps. We need to get that water line up.
Sep 24, 2012 2:50PM
Here we are again ... on the green line!!!

Up to 21 then back down to 3 ... won't be long before we are in the red again.

Why do we bother

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[BRIEFING.COM] Equity indices extended this week's losses with a broad-based retreat. The S&P 500 fell 0.6% to end the week lower by 1.1%, while the Russell 2000 (-1.1%) finished with a 0.9% decline since last Friday.

Staying true to the theme observed throughout the week, the energy sector (-1.5%) tumbled out of the gate, thus dragging the broader market down with it. Once again, dollar strength and crude oil weakness contributed to sector's underperformance, but the ... More


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