Technology-focused ETFs were dragged down on Wednesday by Apple Computer’s earnings miss after the market closed yesterday, though the red ink was limited by the fact that the broader stock market rose.
Apple’s stock fell 4.32 percent, at around $574.97 per share an hour into the trading session, and some of the hardest-hit ETFs were those that assign Apple the largest weight, such as the iShares Dow Jones U.S. Technology Index Fund (IYW). The $1.5 billion iShares fund, which has about 23 percent of its portfolio allocated to the maker of iPhones and iPads, fell 0.64 percent to $68.92 a share.
Apple reported earnings of $9.32 per share, which was shy of analysts’ expectations of $10.37 a share, according to a Wall Street Journal report that used estimates from Thomson Reuters. While the Cupertino, Calif.-based company co-founded by the late Steve Jobs sold more iPhones in the quarter ended June 30 than in the same year-earlier quarter, the number was 26 percent shy of the previous quarter.
The company said its disappointing results, which also included a miss on the revenue front, were linked to its planned transition to a new version of the iPhone, which was hurting sales of the current version. Moreover, the eurozone’s debt crisis is starting to hurt Apple’s sales as well, a conspicuous sign of what the stakes are for the global economy as Europe’s problems deepen.
“There was a large seller in the ‘Q’s’ yesterday before the earnings announcement, but other than that I haven’t seen anything really unusual,” said one ETF trader who spoke to IndexUniverse on condition of anonymity.
The PowerShares QQQ Trust (QQQ), a nearly $33 billion fund based on the Nasdaq 100 Index that has an Apple weighting of just over 19 percent, was down almost 0.67 percent to $62.54 a share.
Much of the downside move for IYW, the “Q’s” and other ETFs was limited by the fact that many other index constituents of various tech ETFs—notably companies such as Microsoft, IBM, Google and Intel—were trading higher Wednesday morning.
Apart from QQQ, the $8.9 billion Technology Select Sector SPDR Fund (XLK) was down 0.46 percent to $28.08 a share. XLK has a 20 percent holding in Apple.
Additionally, the Vanguard Information Technology ETF (VGT), which holds an Apple stake just below 20 percent, closed Wednesday 0.49 percent lower at $66.63 a share.
The Dow Jones industrial average ended 0.47 percent, or 58.73 points, higher at 12,676.05, though the tech-heavy Nasdaq fell about a third of a percent to 2,854.24.
At the time the article was written, the author had no positions in the securities mentioned. Contact Olly Ludwig at firstname.lastname@example.org.
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