Investors Sour on Apple
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A surprise interest rate cut from the Federal Reserve may have rescued the stock market from a steep decline on Tuesday, but it was no help for Apple shareholders.
Apple shares plunged in late trading Tuesday after the company issued a much weaker than expected outlook for the current quarter.
Apple posted 35% December quarter sales growth to $9.6 billion, along with earnings of $1.58 billion, or $1.76 a share. Both numbers were much better than expected, and Mac and iPhone shipments were solid. But iPod sales of 22 million were below forecasts, and the company's current quarter outlook $6.8 billion sales and 94-cent earnings was well below estimates, sending shares skidding.
The news did much to ease fears that the Fed was unresponsive to a market and economic freefall, but stocks still ended the day down more than 1%, adding to the market's worst-ever start to a year.
Yahoo lost 4% on reports that it is considering cutting hundreds of jobs, while eBay fell 4% on reports that CEO Meg Whitman could retire.
Motorola shed 7% ahead of its quarterly results, and Alcatel Lucent lost 12% on a Goldman Sachs downgrade.
Oracle was another big decliner, down 6%, and Microsoft, Cisco, Dell and Sun were off more than 3% each.
The Nasdaq lost 47 to 2292, the S&P fell 14 to 1310, and the Dow lost 128 to 11,971. Volume rose to 6.51 billion shares on the NYSE, and 3.16 billion on the Nasdaq. Decliners led by a 19-13 margin on the NYSE, and 20-10 on the Nasdaq. Downside volume was 55% on the NYSE, and 79% on the Nasdaq. New highs-new lows were 32-1,098 on the NYSE, and 36-982 on the Nasdaq.