The Standard Poor’s 500-stock index and the Nasdaq composite index ended lower on Monday as worries over demand for Apple products drove down its shares and investors braced for earnings disappointments.
Running counter to that was Dell’s stock, which rose 13 percent to about a five-month high at $12.29 after Bloomberg News reported that the No. 3 personal computer maker was in talks with private equity firms to go private. Dell’s gains offset some weakness in the technology sector.
Apple lost 3.6 percent to $501.75 and was the biggest weight on both the S. P. 500 and Nasdaq 100 indexes after reports emerged that the company had cut orders for LCD screens and other parts for the iPhone 5 this quarter because of weak demand. The stock hit a session low of $498.51, the first dip below $500 since Feb. 16.
“With Apple, it seems as if the sentiment has shifted from this being the one stock that everybody wanted to own” to people starting to see it as a company whose business is “slowing down somewhat,” said Eric Kuby, chief investment officer of North Star Investment Management in Chicago.
Adding to investor unease, fourth-quarter earnings kick into high gear this week. Analyst estimates for the quarter have fallen sharply since October. S. P. 500 earnings growth is now seen up just 1.9 percent from a year ago, Thomson Reuters data showed.
The Dow Jones industrial average was up 18.89 points, or 0.14 percent, at 13,507.32. The Standard Poor’s 500-stock index was down 1.37 points, or 0.09 percent, at 1,470.68. The Nasdaq composite index was down 8.13 points, or 0.26 percent, at 3,117.50.
Apple suppliers also lost ground, with Cirrus Logic off 9.4 percent at $28.62 and Qualcomm down 1 percent at $64.24.
The Dow fared better than the other two indexes, helped in part by Hewlett-Packard shares, which rose 4.9 percent to $16.95. The stock, up early in the session after JPMorgan upgraded its rating on the shares and raised its price target to $21 from $15, added to gains after the Dell report.
Tech has “become the arena for private equity or other capital-restructuring type of maneuvers because of the way their valuations and their balance sheets are,” Mr. Kuby said.
An appliance and electronics retailer, Hhgregg, slumped 5.7 percent to $7.44 after the company cut its same-store sales forecast for the full year.
Earnings reports are due this week from Goldman Sachs, Bank of America, Intel and General Electric, among other companies. Third-quarter reports ended with a gain of just 0.1 percent, the worst for an S. P. 500 profit period in three years, according to Thomson Reuters data.
President Obama warned Congress at a news conference on Monday that a refusal to raise the nation’s debt ceiling next month could mean a government shutdown and set off economic chaos.
S. P. futures had little reaction to comments after the bell by the Federal Reserve chairman, Ben S. Bernanke, who urged lawmakers to lift the country’s borrowing limit to avoid a debt default.
Interest rates were lower. The Treasury’s benchmark 10-year note rose 5/32, to 98, and the yield fell to 1.85 percent, from 1.87 percent late Friday.
Article source: http://www.nytimes.com/2013/01/15/business/daily-stock-market-activity.html?partner=rss&emc=rss