 Futures turn sour on Apple forecast
(China Daily)
Updated: 2008-07-23 07:40
US stock-index futures declined as reports from Apple Inc and American Express Co heightened concern that the yearlong profit slump is deepening. Apple, maker of Macintosh computers and iPhones, dropped after predicting fourth-quarter earnings that trailed projections. American Express, the country's biggest credit-card company by purchases, tumbled on second-quarter profit that missed estimates. Standard & Poor's 500 Index futures expiring in September decreased 8.8, or 0.7 percent, to 1,252.8 at 9:02 am in New York. Dow Jones Industrial Average futures slipped 67, or 0.6 percent, to 11,398. Nasdaq-100 Index futures dropped 31.75, or 1.7 percent, to 1,795.75. European stocks sank as Ericsson AB's earnings missed estimates. Asia's regional benchmark index rose. The S&P 500 is poised to pare last week's gains that were spurred by better-than-estimated results at Citigroup Inc, JPMorgan Chase & Co and Wells Fargo & Co. Second-quarter profits at the 113 companies in the index that posted results so far have tumbled 33 percent, compared with analysts' estimates for a 16 percent drop, according to data compiled by Bloomberg. Analysts still expect earnings to climb 3.9 percent this year and almost 20 percent in 2009. The benchmark for US equities has tumbled 20 percent from its October record after profits declined for three straight quarters, the longest stretch since 2002. Financial shares led the retreat as credit losses and asset writedowns sparked by the subprime-mortgage market's collapse topped $460 billion worldwide. Technology, industrial and consumer companies also dropped after record oil prices and the deepening US housing slump prompted businesses and consumers to pare spending. Apple lost $16.14 to $150.15. Fourth-quarter profit will be $1 a share as sales climb to $7.8 billion, the company said. That compares with the average analyst estimate of $1.24 a share in earnings and $8.3 billion in sales. American Express retreated $4.05 to $36.85 after it said second-quarter profit fell 37 percent on worse-than-expected consumer defaults and Chief Executive Officer Kenneth Chenault withdrew his 2008 forecast. American Express, Capital One Financial Corp and Discover Financial Services shares have dropped by more than a third in the past year amid concern the lenders underestimated the depth of the US slowdown. Agencies (China Daily 07/23/2008 page17) |
