A disappointing result from Apple dragged shares of the technology giant lower, weighing on the overall mood.
Apple dropped more than 5 percent after profit fell short of expectations. It sold fewer iPhones than expected, as consumers opted to wait for the new 4S model.
“The market was expecting very strong iPhone sales going into the product launch,” Giri Cherukuri, head trader at Oakbrook Investments, which holds Apple shares, told Bloomberg News. “It stands to reason that a lot of people were waiting for the new iPhone to come out.”
Pacing losses on Wall Street were Federal Reserve comments, made in its Beige Book survey, about the lacklustre economic outlook.
“Overall economic activity continued to expand in September, although many Districts described the pace of growth as "modest" or "slight" and contacts generally noted weaker or less certain outlooks for business conditions,” the Fed said.
In afternoon trading in New York, the Dow Jones Industrial Average shed 0.25 percent, the Standard & Poor's 500 Index fell 0.78 percent and the Nasdaq Composite Index dropped 1.44 percent.
Profit for S&P 500 companies will rise 17% in the third quarter and expand 18% to a record US$99.76 for all of 2011, according to analyst estimates compiled by Bloomberg yesterday.
About three quarters of the S&P 500 companies which reported results since October 11 surpassed analysts’ expectations.
In Europe, the Stoxx 600 Index rose 0.6 percent for the day.
French president Nicolas Sarkozy headed for Frankfurt in an effort to resolve a stalemate with Germany, adding to uncertainty about progress in the talks on measures to end Europe’s debt crisis ahead of this weekend’s summit of European leaders.
Paris and Berlin don’t agree on how to bolster the European Union’s bailout fund, and the dispute is stalling negotiations, Sarkozy said on Wednesday.
"In Germany, the coalition is divided on this issue. It is not just Angela Merkel who we need to convince," Sarkozy told the parliamentarians at a lunch meeting, according to Charles de Courson, one of the legislators present, Reuters reported.
Meanwhile, Bank of England policy makers voted unanimously to boost the size of their asset-purchase stimulus, according to minutes of their October 6 meeting released today.
Moody's downgraded Spain's credit rating by two notches, while in Greece mass protests against the nation’s austerity measures turned violent.
(BusinessDesk)
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