Apple Rumors Stifle Stocks

On an otherwise quiet day in terms of major earnings announcements and economic data, the market is in a tizzy thanks to news out of the technology and financial sectors. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up by 22 points, or 0.17%.

As I discussed earlier today, the biggest news in the market is, without doubt, that Apple (NASDAQ: AAPL  ) may be about to report worse-than-expected figures for iPhone sales when it announces earnings on Jan. 23. All the major media outlets are citing unnamed sources that claim the technology giant reduced orders for iPhone 5 component parts by as much as 50% for the first quarter of 2013. If the rumors are true, the reduction would add credibility to claims that Apple can't operate at the same level without the late Steve Jobs at the helm. Shares in the company are down 3.4% in afternoon trading.

All three financial companies on the Dow are lower today as the nation's largest banks prepare to announce earnings later this week. Last Monday, Bank of America (NYSE: BAC  ) reported that it had reached an agreement with Fannie Mae to resolve a multibillion-dollar dispute related to toxic mortgages which the latter had purchased from Countrywide Financial, a leading subprime-mortgage originator that B of A acquired in 2008.

Investors are also awaiting two announcements related to JPMorgan Chase (NYSE: JPM  ) . First, it is widely expected that the Office of the Comptroller of the Currency -- the banking industry's primary regulator -- will enter consent orders against the bank related to money laundering and risk management. And secondly, JPMorgan's board of directors is set to release a 50-page report detailing the management's shortcomings in the London Whale scandal, which led to more than $6 billion in losses after CEO Jamie Dimon publicly dismissed it as a "tempest in a teapot."

Finally, shares of American Express (NYSE: AXP  ) are still adjusting to news that it will cut 5,400 jobs from its travel business. The credit card company preannounced fourth-quarter earnings last week, reporting $637 million in net income. The bottom line was affected by nearly $1 billion in one-time charges related to the layoffs, as well as "cardmember reimbursements for various types of transactions dating back several years," among other things.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 14, 2013, at 3:07 PM, dwilh51183 wrote:


  • Report this Comment On January 14, 2013, at 3:11 PM, dwilh51183 wrote:

    SAME OLD NEWS we heard 1 month ago by the short sellers . Don't sell AAPL, ITS WAY TOO CHEAP. AAPL only cut orders because they have enough iPhone 5's in stock, and are ready to ramp up production on IPHONE 5S, IPHONE 6 AND an lower priced but still quality iPhone for underdeveloped nations.AAPL SALES HAVE BEEN BRISK. LOOKING FOR ANOTHER GREAT QUARTER

  • Report this Comment On January 14, 2013, at 3:11 PM, dwilh51183 wrote:

    Charlie Wolf with Needham & Company said. "But in view of the fact that Mac sales held steady at around 520,000 units but overall PC sales declined by 265,000 units from 1.90 million to 1.64 million units, we believe the inescapable conclusion is that the iPad is beginning to cannibalize a material portion of PC sales in this market."

  • Report this Comment On January 14, 2013, at 3:11 PM, dwilh51183 wrote:

    when it comes to Apple we need to look to the long term. This week, we received some great news that reaffirmed Apple's forward prospects. First, the company reported that customers have downloaded over 40 billion apps—nearly half of which were downloaded last year alone. December brought a record-breaking two billion app downloads. To date, the App Store offers over 775,000 apps, which translates in additional revenue for Apple.

    But that's not all. According to market research firm Kantar, the iPhone commands more than half of the U.S. smartphone market for the first time ever. The iPhone now boasts 53.3% market share while Android's market share fell to 41.9%. Meanwhile, the Windows Phone has 2.7% market share while the Blackberry has a paltry 1.4% of the market.

    This is significant because the iPhone remains a strong growth driver for Apple—despite the regular upgrades, U.S. consumers still can't get enough of this premium smartphone. Some analysts forecast that Apple sold nearly 51 million iPhones last quarter, a 43% jump over the same quarter last year. LOUIS NAVELLIER

  • Report this Comment On January 14, 2013, at 3:12 PM, dwilh51183 wrote:

    Sacconaghi said he was maintaining his outperform rating and a $750 price target on the shares. That was because in the longer term, Apple offered “a compelling combination of attractive growth, reasonable price, and significant future option value.”He added that the company was also due for a dividend raise this year, another factor in its favor: “We believe that Apple’s announcement of a dividend in early 2012 was a significant catalyst for the stock, and that the company ought to consider raising its dividend this year, and potentially taking on debt to do so.”

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