Apple and Seagate Tumble After Terrible Earnings

Shares of Apple and Seagate are down significantly in early trading on Tuesday, while shares of Dow Jones component Intel are up slightly.

Jan 28, 2014 at 11:20AM

Shares of Apple (NASDAQ:AAPL) and Seagate (NASDAQ:STX) plummeted in early trading on Tuesday, after both companies reported disappointing quarters Monday afternoon. In contrast, Dow Jones Industrial Average (DJINDICES:^DJI) component Intel (NASDAQ:INTC) rallied modestly, and the index itself had added 56 points as of 11:30 a.m. EST.

Consumers feeling confident
Part of the reason for the Dow Jones' rally may have been data from the Conference Board showing U.S. consumers were feeling significantly better about the economy than analysts expected. The consumer confidence reading of 80.7 beat the 78.1 estimate.

Consumers might be feeling more positive because the economy is strengthening; they also may be more likely to spend. In either case, a strong confidence reading bodes well for the nation's economy, and by extension the stock market.

Apple whiffs on iPhone sales
Apple shares fell more than 7% early on Tuesday after the company reported earnings for the holiday quarter. While Apple sold 51 million iPhones -- a new record -- it came in short of analyst expectations. Even worse, Apple's management gave weak guidance for the coming quarter, suggesting that its iPhone business -- which still accounts for the vast majority of the company's revenue and profit -- may have peaked.

Apple's management again promised new products coming later this year, but didn't divulge details. With its iPhone business stalling, investors were understandably dumping shares.

Seagate hit by slowing PC market
Shares of hard drive maker Seagate tumbled 11% after the company's earnings came in short of expectations.

Traditional PCs have been in decline for several quarters, weighing on demand for Seagate's hard drives from its primary market. But bulls had hoped that demand for Seagate's products by cloud storage providers would more than offset the weakness in the PC space. That didn't happen; cloud-related demand actually fell.

Intel moves higher
Intel had gained 0.80% by late morning, which was slightly better than the overall market, but there wasn't much news to account for the move.

It's possible that some investors may have projecting Apple's earnings onto Intel -- Apple's Mac sports Intel-made processors, and though Apple's iPhone had a disappointing quarter, Mac sales actually rose 20% from the prior year.

January is almost over -- get our top stock pick for 2014!
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information