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.

Although U.S. stocks opened up this morning, they weren't able to sustain that momentum, as the S&P 500 fell 0.5% on Wednesday. The narrower Dow Jones Industrial Average (DJINDICES:^DJI) fared slightly better, losing just 0.3%. There's good reason to believe the Dow will outperform the S&P 500 tomorrow as well, since the S&P 500's heaviest weighting, Apple (NASDAQ:AAPL), which isn't a Dow component, looks set for a tough day.


Sometimes there's just no pleasing Wall Street. Apple beat analysts' estimates for earnings per share and revenue, yet the stock is being punished in the after-hours session, down 8% at 7:47 p.m. ET. Indeed, the company posted record quarterly revenue of $57.6 billion, earning $14.50 per share, where analysts were looking for $57.5 billion and $14.09 per share, respectively, according to Thomson Reuters I/B/E/S.

Earnings per share were also much significantly higher than Apple's guidance suggested (admittedly, Apple has a long track record of under-promising and over-delivering in this manner). Going by the actual weighted average diluted share count during the quarter, and using the midpoint of the guidance range, produced an earnings-per-share forecast of just $13.30.

Why, then, the drop in the shares?

For one thing, quarterly profits of $13.1 billion are flat relative to the year-ago quarter ... which was itself flat compared with the fiscal first quarter of 2012. For a growth company, that's a long time to go without any growth.

Second, iPhone unit sales of 51 million were below analysts' expectations for 55 million.

Third, the market is forward-looking, and Apple's guidance for its fiscal second quarter falls well short of analysts' expectations. By my calculations, even using the top end of Apple's guidance range and an aggressive assumption for share count reduction, earnings per share would still be more than a dollar short of the $10.93 consensus estimate.

However, for investors whose time horizon extends beyond the next quarter, there were other, more positive elements to hang one's hat on.

Take the China Mobile deal, for example. Earlier this month, I wrote that this is "a long-term bet, not a short-term catalyst for a significant rerating in the shares." I still believe that, and so does Apple CEO Tim Cook, who told analysts and investors on the earnings call that the iPhone is available through China Mobile in only 16 cities so far, but that number will rise to 300 by the end of the year. "We've got a ramp in front of us," he concluded.

Or how about the opportunity in mobile payments, which The Wall Street Journal highlighted in a story last Friday? Cook weighed in by stating: "people are loving to be able to buy content, whether it's music or movies or books from the iPhones using Touch ID. It's incredibly simple and easy and elegant." Cook confirmed that mobile payments were one of the drivers for developing Touch ID (the fingerprint sensor on the iPhone 5s).

Last Wednesday, legendary investor Carl Icahn tweeted that he had bought $500 million worth of Apple shares within the past two weeks. Thursday, he again took to Twitter to announce that he had added another $500 million worth that very day, bringing his total position to $3.6 billion. If today's after-hours action is any indication, investors will get the opportunity to buy shares at a discount to the price this wily billionaire paid on a billion-dollar commitment. Just remember: Carl Icahn didn't accumulate a $20 billion fortune listening to Wall Street weathervanes.

Fool contributor Alex Dumortier, CFA, has no position in any stocks mentioned; you can follow him on Twitter: @longrunreturns. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.