Tuesday 25th September 2012
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Wall Street was mixed as Apple failed to meet the demand for its iPhone5 model, while the latest data on German business confidence showed an unexpected decline.
Apple sold more than five million of its new iPhone5 model, a number that fell short of some expectations. It wasn't due to a lack of popularity however; demand simply exceeded initial supply and that didn't sit well with analysts and investors.
"We believe that sales could have potentially been much higher if not for supply constraints," William Power, an analyst with Baird Equity Research, wrote in a note, according to Reuters.
Shares of Apple were last down 1.3 percent, weighing on the Nasdaq Composite Index, which was last down 0.51 percent.
Also weighing on equity markets on both sides of the Atlantic were fresh European worries as business sentiment in Germany slid for the fifth month in a row and Spain continued to dither about asking for a bailout.
Germany's Ifo institute said its business climate index, based on a survey of 7,000 executives, fell to 101.4 in September from 102.3 in August. Polls of economists by both Bloomberg News and Reuters had forecast an increase.
"There's no magic bullet to this European crisis," Hayes Miller, head of asset allocation in North America at Baring Asset Management, told Bloomberg. "The politicians have been trying to put on a face of unity. Yet there are no easy solutions. You're going to have an economic growth rate that's going to be quite poor over the next year. It's going to be a challenging environment."
Indeed, International Monetary Fund chief Christine Lagarde foreshadowed the fund might soon lower its estimates for global economic growth.
"We continue to project a gradual recovery, but global growth will likely be a bit weaker than we had anticipated even in July, and our forecast has trended downward over the last 12 months," Lagarde said in a speech at the Peterson Institute for International Economics in Washington, DC.
In late afternoon trading in New York, the Standard & Poor's 500 slipped 0.08 percent. The Dow Jones Industrial Average eked out a 0.06 percent gain.
In Europe, the Stoxx 600 Index ended the day with a 0.4 percent decline from the previous close. The euro didn't fare much better, weakening 0.6 percent against the greenback.
Finding favour with investors, however, were shares of Google, which climbed to a record, amid optimism over the search engine's outlook. Shares were last up 2.1 percent at US$749.70, after earlier rising as high as US$749.87.
"The markets have to come to appreciate that Google's been making money hand over fist all this time," Brian Wieser, an analyst at Pivotal Research Group, told Reuters.
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