US stocks notched their second decline in as many days Wednesday, pulled down by a technology stock slump headlined by Apple and Microsoft.Both companies delivered disappointing quarterly results or outlooks the night before, setting the stage for the sell-off in the technology sector."Apple is the biggest publicly traded company in the world, so it's going to have a big impact on the indices," noted Erik Davidson, chief investment officer at Wells Fargo Private Bank.
The slide wasn't that broad, however. Financial and utilities stocks were among the big gainers. And homebuilders got a boost from a report indicating US home sales surged last month to the fastest pace in more than eight years.The Dow Jones industrial average slid 68.25 points, or 0.4 percent, to 17,851.04. The Standard & Poor's 500 index lost 5.06 points, or 0.2 per cent, to 2,114.15.
The Nasdaq composite shed 36.35 points, or 0.7 per cent, to 5,171.77. The tech-heavy index, which hit a new high on Monday, remains the best-performing index for the year. It's up 9.2 per cent, while the S&P 500 is up 2.7 per cent and the Dow is essentially flat.Five of the 10 sectors in the S&P 500 index declined, led by a 1.6 per cent drop in technology stocks. Financials led the gainers, rising 0.7 per cent.
The major stock indexes declined from the get-go as traders reacted to weaker showings late Tuesday from Microsoft, Yahoo and Apple.Yahoo posted a nearly US$22 million loss driven by soaring commissions paid to its partners and flat sales. The stock slipped 49 cents, or 1.2 per cent, to US$39.24.
Microsoft's slide was more pronounced at 3.7 per cent. The company reported a hefty quarterly loss stemming from an expense of US$8.4 billion related to its purchase of the Nokia phone business over a year ago. The stock lost US$1.74 to US$45.54.
Apple fared the worst, shedding 4.2 per cent after management gave a cautious outlook for the current quarter and didn't provide much detail on how the company's new smartwatch was doing. Apple's latest results also stirred investor concerns about a slowdown in the growth of iPhone sales. The stock fell US$5.53 to $US125.22.
Despite its size, Apple's latest results don't necessarily speak to the overall health of the economy or corporate America, Davidson said."Do iPhone sales tell us a lot about the broader economy and the markets or does it tell us more about Apple? It probably tells us more about Apple," Davidson said. "In general, you have a US economy that is recovering. Earnings are going fairly well."
Several other companies, including consumer reviews service Angie's List, Tupperware Brands and Packaging Corp of America reported earnings or revenue that fell short of Wall Street's expectations.Whirlpool and Chipotle Mexican Grill were among the companies whose earnings impressed investors Wednesday.
McDonald's and Caterpillar are among the other big-name companies reporting earnings on Thursday.