As of 11:05 a.m. EDT, the Dow Jones Industrial Average
Well, there's Apple
The biggest culprit in the Nasdaq's spill today is Apple. The company accounts for about 19% of the index's weighting and is off just under 5% today after missing earnings expectations last night. However, the interesting note is that while Apple is down today, other tech stocks seem to be on fire.
Looking at tech components in the S&P 500
However, if you look at tech companies soaring today, Altera
The common theme with tech winners seeing gains is earnings. In both Juniper's and Broadcom's cases, their forward guidance was actually below expectations. Normally, that'd be grounds for a pretty serious price cut. However, with many tech stocks already sold-off dramatically over the past three months, a big earnings beat isn't needed to soar. Often, investors are just hoping the companies don't utterly whiff it.
And there's the interesting aspect of today's Nasdaq drop: It's almost entirely due to Apple. The fact Apple missed expectations says something about broader technology space: Even Cupertino isn't immune to Europe's slowdown. However, Apple's earnings are also due to factors affecting the company itself. For example, light iPhone sales from customers holding out for the iPhone 5 aren't a condemnation of smartphone growth in the year ahead. Investors shouldn't base expectations for broader tech growth around Apple; it marches to its own drummer.
All in all, the takeaway is that many companies continue to perform in spite of Europe's woes. Slowdowns in Europe will cut into sales growth, likely for years to come, but not enough that leading tech companies should be seeing stock declines of 25% or higher. There's a lot of good buys lurking out there. Happy hunting!
Long-term tech ideas
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Eric Bleeker owns shares of no companies listed above. The Motley Fool owns shares of Apple and Corning. Motley Fool newsletter services have recommended buying shares of Corning and Apple. Motley Fool newsletter services have also recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.
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