Dow Ends Flat Ahead of Fed Meeting; Apple Slides After Hours

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

With the Federal Reserve set to meet tomorrow to decide the future of its stimulus program, stocks finished mostly flat today as earnings reports this morning were mixed. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) ended down just 1 point, or 0.01%, as Merck weighed on the blue chips following a sharp decline in profits in its quarterly report. The S&P 500, meanwhile, ticked up 0.1%.

Pending home sales fell sharply last month, down 5.6% in September, its fourth straight monthly, and worse than expectations of a 1.3% decline,. As mortgage rates have come up, the housing recovery seems to have slowed, though industry experts still expect a tight inventory to push up prices. Homebuilder stocks took a hit on the news.

Apple (NASDAQ: AAPL  ) delivered earnings after hours, with shares falling off 2%. The tech giant beat top-and-bottom-line estimates, reporting earnings per share of $8.26 on revenue of $37.5 billion, compared with EPS estimates of $7.93 and sales of $36.8 billion. iPhone sales jumped 26% from the quarter a year ago to 33.8 million; iPad sales were flat and Mac sales were down slightly. Gross margin was down to 37% from 40% a year ago. While earnings were better than the analyst consensus, they were still down from a year ago, and shares have gained 34% since the end of June in part because of activist Carl Icahn's repeated demands for a $150 billion share buyback. Today's pullback may be a response to inflated expectations with the recent share appreciation. Sales in Japan spiked, gaining 41%, but the report seemed to confirm that Apple will need to create a new product category to significantly grow sales.

J.C. Penney (NYSE: JCP  ) shares were moving in the opposite direction, finishing up 8.8% today after CEO Myron Ullman said the company would deliver positive same-store sales this quarter. It was the third time in just five weeks that Ullman made the projection, though with the quarter nearly wrapped up, today's announcement figures to be the most definite. Still, the repeated claims of a rebound underscore the company's immediate need to turn its business around. While positive comps are certainly a step in the right direction, J.C. Penney continues to see huge losses, and has a $5 billion debt burden to deal with. Shares are still down 67% this year. I'd say the company needs about ten more announcements like today's before we can even being talking about a turnaround.

Can Apple make history again?
Apple has a history of cranking out revolutionary products -- and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

Read/Post Comments (0) | Recommend This Article (1)

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.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2703069, ~/Articles/ArticleHandler.aspx, 9/27/2016 10:10:19 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,122.15 27.32 0.15%
S&P 500 2,151.69 5.59 0.26%
NASD 5,274.93 17.44 0.33%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 9:54 AM
^DJI $18122.15 Up +27.32 +0.15%
AAPL $112.62 Down -0.26 -0.23%
Apple CAPS Rating: ****
JCP $9.68 Up +0.11 +1.15%
J.C. Penney CAPS Rating: *