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
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 (NYSEArca: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
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 (NasdaqGM: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
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 (NYSEArca: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
(NYSEArca: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
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