Apple Inc wowed investors this week while a disappointing outlook from Amazon.com Inc revived anxiety about the overall tech sector as the busiest week of first-quarter earnings season concluded.
Deep losses on Friday pushed the market into the red for the week, with the tech-rich NASDAQ Composite Index suffering the biggest losses, shedding 19.96 points (0.49 percent) to close on 4,075.56, while the Dow Jones Industrial Average declined 47.14 (0.29 percent) to 16,361.46 points and the broad-based S&P 500 slipped 1.45 (0.08 percent) to end at 1,863.40.
Broad selling pressure, which had receded slightly for about a week-and-a-half, came back with a vengeance on Friday after Amazon delivered a skimpy outlook for profit margins and projected second-quarter operating losses as high as US$455 million.
Analysts also cited rising concerns about Ukraine as a major drag on the market.
Marblehead Asset Management director Mace Blicksilver said that the week’s performance of so-called “glamor” stocks like Facebook Inc and Netflix Inc suggests that “this buyer’s strike is still going on.”
Netflix initially surged after the online streaming company reported that revenues breached US$1 billion and that it planned a bump in subscription prices. Facebook also got a quick lift after announcing that profits tripled to US$642 million on strong gains in mobile users and mobile advertising.
Nevertheless, both stocks ended the week with declines.
“What you see today is a continuation of the trend of the high-growth stocks struggling,” Kenjol Capital Management portfolio manager David Levy said.
Despite the weak Amazon report and a handful of other earnings disappointments, the bulk of first-quarter reports so far have bested expectations. Of the 203 companies that reported through Thursday, 138 beat expectations, 45 missed projections and 20 were on target, according to S&P Capital IQ.
Industrial heavyweight Caterpillar Inc, which has had disappointing results in recent quarters, raised its profit forecasts as improved performance in the energy, transportation and construction sectors that offset continued weakness in mining.
Fellow Dow member Boeing Co also pleased Wall Street by raising its annual profit outlook due to strong demand for new jetliners. Perhaps the biggest standout of the week was Apple, which surged nearly 9 percent in the two days after releasing its report on Wednesday.
In addition to reporting profits that beat expectations by a wide margin, the maker of the iPhone unveiled a dividend increase, a ramp-up in stock buybacks and a seven-for-one stock split.
However, analysts cautioned that Apple still faces pressure to launch another blockbuster product.
“We are ready,” Forrester analyst Frank Gillett said. “It is time for Apple to show us something from their labs; from behind their closed doors.”
Other strong reports came from American Airlines Inc, Comcast Corp, Dow Chemical Co, Lockheed Martin, Microsoft Corp and Travelers Companies. The disappointments included Ford Motor Co and United Airlines Inc.
Besides earnings, investors kept an eye on increasingly fraught tensions between Russia and Ukraine that continue to reverberate with governments around the world.
What investors fear the most about the East-West standoff over Ukraine is the unknown, BMO Global Asset Management market strategist Brent Schutte said.
“You can never say for sure what’s going to occur or if it spirals out of control,” he said.
Earnings will continue to play a central role in markets next week with reports from several prominent companies, including ExxonMobil Corp, Merck & Co Inc, Time Warner Inc and Twitter Inc.
Investors are also set to digest a much heavier week of economic data, with major releases set to include the first estimate of the US’ GDP and the monthly jobs report for this month.
The US Federal Reserve will also be back in the headlines with Wednesday’s conclusion of a two-day meeting of the committee that sets its monetary policy.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained