Tech stocks a drag on market after Apple's miss
Tech stocks moved broadly lower in midday trading after Apple earnings come in below expectations. Despite gloom over tech stocks, Intel breaks out after strong earnings growth.
Stocks are mixed in midday trading Wednesday as investors weigh a rare earnings miss by Apple against a surprise jump in new home construction last month.
Gains by Travelers and other financial firms pulled the Dow Jones industrial average higher. Travelers Cos., a major insurer, jumped 5 percent after reporting revenue that beat analysts' expectations.
The Dow was up 13 points, or 0.1 percent, 11,591 at 12:10 p.m. Eastern. The Dow's second-best stock was Intel, which rose 4 percent. Intel Corp. jumped 4.5 percent after its net income rose 17 percent last quarter, beating Wall Street's target.
Other technology stocks were broadly lower. Apple Inc. slumped 4 percent after the company's income and revenue fell short of forecasts. It was a rare miss for the company, which had jumped 31 percent this year through Tuesday. Apple blamed the shortfall on a later-than-usual release of its newest iPhone.
The Nasdaq composite slid 20, or 0.8 percent, to 2,637. The S&P 500 was down 2, or 0.2 percent, to 1,223.
The disappointing results from Apple were tempered by a rebound in the housing market in September. Builders began new homes at the fastest pace in 17 months. Most of the gains came from the construction of new apartments. The pace is still about half what economists say consistent with a healthy housing market.
Investors had plenty of corporate news to digest on Wednesday. Abbott Laboratories announced plans to spin off its drug business. Abbott's stock rose 2 percent.
Large banks traded higher. Morgan Stanley rose 1 percent after a jump in investment banking revenue helped it earn $1.15 a share, well above analyst expectations of 30 cents per share. Citigroup rose 2 percent. The bank agreed to pay $285 million to settle civil fraud charges that it misled buyers of complex mortgage investments just as the housing market was starting to collapse.
BlackRock Inc. dropped 4 percent after the money management giant said its assets under management fell 3 percent.
Airlines fell. AMR Corp., the parent of American Airlines, slid 4 percent after reporting a loss that was worse than Wall Street analysts predicted. The company said its fuel spending jumped 40 percent, wiping out revenue gains from higher fares and fees. JetBlue Airways Corp. dropped 5 percent after the company said its chief financial officer has resigned.
At 2 p.m. the Federal Reserve will release its survey of business conditions around the country.