Apple and Amazon miss Street estimates

Updated: 6:07 p.m. ET

Apple (AAPL) shares briefly fell below $600 after hours as the company's earnings of $8.67 a share missed Wall Street estimates of $8.75. The issue seems to be a shortfall of iPad production. Revenue was up 27% to $35.97 billion, slightly ahead of estimates.

The shares had fallen $7.29 to $609.54 in regular trading and fell to as low as $597 after hours -- trading was briefly halted -- before rebounding to $607.75, down $1.79, at 6:07 p.m. ET. Apple hasn't closed below $600 since July 30. Apple shipped 26.9 million iPhones in its fiscal fourth quarter, a bit more than expected, but iPad shipments were 14 million, lower than expected.

Amazon.com (AMZN) shares were down as much as $20 after hours before buying brought the stock back to $220, down from a regular close of $222.92. The company reported a revenue miss and a larger-than-expected​ earnings loss.

The results came after stocks moved modestly higher today, breaking a two-day losing streak as earnings from energy and health care companies gave the market a boost. But the Apple and Amazon results seem certain to weigh on stocks on Friday.

The  Dow Jones industrials ($INDU) closed up 26 points to 13,104; the blue chips had been up as many as 87 points early in the day. The Standard & Poor's 500 Index ($INX) gained 4 points to 1,413, while the Nasdaq Composite Index ($COMPX) was up 4 points to 2,986. The Nasdaq-100 Index ($NDX) climbed 2 points to 2,658.

Article continues below.Earnings from Procter & Gamble (PG) and interest in the release of Microsoft's Windows 8 operating system were offset by weakness in Boeing (BA) as well as Apple and Amazon.com. Microsoft (MSFT) dropped 2 cents to $27.88. (Microsoft is the publisher of MSN Money.)

A lackluster report from Apple
Apple normally blasts past analyst estimates. But today's results were only good. The 26.9 million iPhone shipments were up 58% from a year ago and ahead of estimates. The iPad shipments, while up 26% from a year ago, were below the 15 million to 16 million units expected.

Macintosh computer shipments were up 1% to 4.9 million units. IPod shipments fell 19% to just 5.3 million units.

The company expects $52.6 billion in revenue for the all-important fiscal first quarter, which includes the holiday season.

With the regular close of $609.54, Apple is off 13.2% from its closing peak of $702.10 on Sept. 19.

Amazon: Trying to get as close to break-even as possible
Amazon shares were down only 94 cents before the earnings release came out.

The company continued to invest in new fulfillment centers and new operating technologies at the expense of profits.

"Our approach is to work hard to charge less. Sell devices near break-even, and you can pack a lot of sophisticated hardware into a very low price point," CEO Jeff Bezos said in a statement.

While the company did not cite the global economy, it projected $20.5 billion to $22.75 billion in revenue, lower than the Street estimate is $22.8 billion. Its operating loss could be as much as $490 million; the upper end of the range was a profit of $310 million. Operating income in the year-ago fourth quarter was $260 million.

Amazon lost $274 million, or 60 cents a share, in the third quarter, down from a profit of $63 million, or 14 cents a share. Stripping out a one-time charge for its LivingSocial business produced an adjusted loss of 23 cents. Wall Street had expected  8 cents.

Revenue was up 27% to $13.8 billion. Wall Street had expected $13.92 billion.

Market struggles to get past a rumor
The market opened strongly but spent most of the day around break-even on a rumor that Fitch Ratings would be downgrading U.S. debt. That took the Dow from a gain of about 30 points to a loss of 37 points in a matter of minutes. But a Fitch spokesman told Bloomberg News and CNBC that the agency doesn't expect to address the nation's debt rating until late 2013.

A second problem weighed on markets: Americans signed fewer contracts than forecast in August to buy previously owned homes. European stocks were lower, and the dollar was rising against the euro.

Separately, Bloomberg News reported this afternoon that Apple may launch an Internet radio service in the first quarter of 2013. Pandora Media (P) and Sirius XM Radio (SIRI) were both lower.

P&G's turnaround plan may be working
Procter & Gamble was up $1.99 to $70.07. The consumer-products giant said fiscal-first-quarter​ profits fell 7% on a stronger dollar and costs related to restructuring. The results, however, beat Street expectations in a sign that a turnaround plan that it started in the spring is beginning to work.

P&G announced a plan to focus on its 40 top businesses, 20 biggest new products and 10 most profitable emerging markets as it undergoes a cost-cutting plan aimed at saving $10 billion by fiscal 2016.

The maker of Tide detergent and Pampers diapers said today that it's ahead of schedule with its planned job cuts, and that it might consider going beyond its $10 billion cost-cutting plan.

P&G was the top performer among the 30 Dow stocks. Boeing, Travelers Companies (TRV) and Home Depot (HD) were the big weights on the index. 

Energy prices -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Crude oil (-CL)			$86.05			$85.73			-6.66%			-12.93%
(per barrel)
Heating oil (-HO)			$3.0452			$3.0264			-3.61%			4.50%
(per gallon)
Natural gas (-NG)			$3.4340			$3.4500			3.43%			14.89%
(per mil. BTU)
Unleaded gasoline (-RB)			$2.6323			$2.5913			-9.86%			-0.94%
(per gallon)
Brent crude			$108.49			$107.85			-1.50%			1.03%
(per barrel)
Retail gasoline			$3.5990			$3.6250			-4.96%			9.86%
(per gallon; AAA)

Pending home sales slip
Housing stocks tumbled after the National Association of Realtors' Pending Home Sales Index fell 2.6% to 99.2 in August from July, when the index hit a revised 101.9. That was the highest level since April 2010.

But the index was still up 10.7% in August over August 2011.

PulteGroup (PHM) was off 44 cents to $17.01. D.R. Horton (DHI) fell 30 cents to $21.11.

The report came after a Wednesday report showing a big jump in new-home sales in September.

The home-sales report was one of two disappointing economic reports. The other was a decline in durable-goods orders. The day's good news: The Labor Department reported a decline in jobless claims for the latest week.

Best Buy slumps on earnings warning
Best Buy (BBY) retreated $1.75 to $15.17. The retailer, resisting a takeover attempt by its founder, said fiscal-third-quarter​ profit will be "significantly" below last year’s results as sales at established stores continue to decline.

Cliffs Natural Resources (CLF) declined $4.49 to $38.20. The largest U.S. iron-ore producer reported third-quarter results that missed analysts’ estimates as the price of the steelmaking raw material dropped.

Among other earnings:

Casino companies rallied as Wynn Resorts (WYNN) added $8.14 to $120.43. Earnings for the  owner of casinos in Nevada and Macau beat forecasts and the company doubled its dividend. MGM Resorts International (MGM) rose 24 cents to $10.88. Las Vegas Sands (LVS) increased $1.96 to $46.25.

Symantec (SYMC) climbed $1.16 to $18.54. The security-software maker forecast sales that topped projections. Symantec is doing a better job now at signing up customers at a time of sluggish spending by corporations and weak personal-computer sales, analyst Daniel Ives of FBR Capital Markets told Bloomberg News.

Akamai Technologies (AKAM) surged $2.43 to $38.54. The company, which helps businesses deliver data more quickly over the Internet, reported that sales and earnings beat estimates. Akamai was also raised to "outperform" from "market perform," with a $90 target price, by Oppenheimer analyst Timothy Horan.

ConocoPhillips (COP) gained $1.21 to $57.16. The oil-and-gas producer said profit excluding one-time costs and gains was $1.44 a share, 25 cents better than the Street estimate.

Short hits from the markets -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.1100%			0.110%			22.22%			1000.00%
5-year Treasury note			0.819%			0.748%			30.00%			-1.33%
10-year Treasury note			1.828%			1.775%			11.67%			-2.30%
30-year Treasury bond			2.981%			2.933%			-1.68%			3.18%
Currencies
U.S. Dollar Index			80.118			80.015			0.12%			-0.50%
British pound			1.6124			1.6044			-0.23%			3.77%
(in U.S. $)
U.S. $ in pounds			£0.620			£0.623			0.23%			-3.64%
Euro in dollars			$1.30			$1.30			0.75%			-0.05%
(in U.S. $)
U.S. $ in euros			€ 0.772			€ 0.771			-0.75%			0.05%
U.S. $ in yen			80.26			79.80			2.93%			4.09%
U.S. $ in Chinese			6.26			6.24			-0.26%			-0.96%
yuan
Canada dollar			$1.006			$1.007			-1.04%			2.55%
(in U.S. $)
U.S. dollar			$0.995			$0.993			1.12%			-2.50%
(in Canadian $)
Commodities
Gold (-GC)			$1,713.00			$1,701.600			-3.43%			9.33%
(per troy ounce)
Copper (-HG)			$3.551			$3.568			-5.52%			3.33%
(per pound)
Silver (-SI)			$32.0780			$31.620			-7.23%			14.91%
(per troy ounce)
Wheat (-ZW)			$8.7275			$8.840			-3.30%			33.70%
(per bushel)
Corn (-ZC)			$7.4200			$7.545			-1.88%			14.77%
(per bushel)
Cotton			$0.7273			$0.727			2.94%			-20.67%
(per pound)
Coffee			$1.6100			$1.598			-7.20%			-29.89%
(per pound)
Crude oil (-CL)			$86.05			$85.730			-6.66%			-12.93%
(per barrel)