Stocks fell around the world as financial results from technology companies disappointed investors and a drop in commodities to a 13-year low dragged down mining shares.
Nasdaq 100 Index futures slid 1.1 percent at 7 a.m. in New York. Apple Inc.’s revenue forecast missed analysts’ estimates and Microsoft Corp. posted its largest quarterly loss, sending shares down in early trading. Oil fell with copper, and gold dropped below $1,100 an ounce. The pound gained after the Bank of England said a growing number of policy makers were concerned about rising inflation pressures.
Results from Apple hit shares of suppliers from China’s AAC Technologies Holdings Inc. to Dialog Semiconductor Plc, after a U.S. gauge of technology stocks reached a record this week. BHP Billiton Ltd., the world’s biggest miner, said its petroleum, copper and coal output will fall and Goldman Sachs Group Inc.’s Jeffrey Currie predicted gold may drop below $1,000 an ounce, underscoring a structural bear market in commodities.
Apple’s “supply chain clearly has ramifications for companies across the world,” said Daniel Murray, head of research at EFG Asset Management in London. “I would interpret the recent commodities selloff as partly a reflection of stronger dollar sentiment, as well as fears about China. None of that looks like it’s going to change any time soon.”
The MSCI All-Country World Index slid 0.3 percent. The Stoxx Europe 600 Index and Standard & Poor’s 500 Index E-mini futures both lost 0.4 percent. The Nasdaq Composite Index slipped 0.2 percent on Tuesday from a record.
Apple Suppliers
Apple lost 5.6 percent after saying iPhone shipments for the fiscal third quarter and the company’s revenue forecast for the current period missed analysts’ projections.
Suppliers such as AAC Technologies and Taiwan’s Compal Electronics Inc. tumbled at least 6 percent. Chip supplier Dialog Semiconductor slumped 7.1 percent and Infineon Technologies AG lost 3.6 percent. ARM Holdings Plc, whose technology is used in iPhones, slid 3.1 percent. The company also posted quarterly revenue that missed estimates.
Microsoft dropped 3.8 percent. Yahoo! Inc. lost 2.2 percent after forecasting sales in the current quarter below analysts’ estimates.
Qualcomm Inc., Coca-Cola Co., Boeing Co. and American Express Co. are among 27 S&P 500 companies releasing results on Wednesday. Of the 91 companies in the gauge that have reported, 74 percent have beaten earnings estimates and 55 percent have topped sales projections, according to data compiled by Bloomberg.
Hedges Fade
BHP Billiton dropped 3.5 percent, leading basic-resource producers lower.
The Bloomberg Commodity Index of 22 raw materials resumed declines, falling as much as 0.6 percent to the lowest since June 2002. Bullion for immediate delivery slipped 0.5 percent to $1,095.68, while futures sank 0.8 percent in the U.S. in the longest declining streak since 1996.
“With the more positive outlook on the dollar, and with debasement risk starting to fade, the demand to use gold as a diversifying asset against the U.S. dollar becomes less and less important,” said Goldman’s Currie. “We think we are in a structural bear market, not only in gold, but across the commodity complex, as the individual commodity stories are reinforcing to one another, creating a negative feedback loop.”
Copper, zinc, lead and nickel lost as much as 2 percent, while tin slumped as much as 4.9 percent.
Crude Inventories
West Texas Intermediate crude retreated 1.1 percent to $50.32 a barrel, while Brent slipped 0.6 percent to $56.68 ahead of U.S. government data on oil stockpiles.
U.S. crude inventories rose by 2.3 million barrels last week, the industry-funded American Petroleum Institute was said to have reported. While a drop of 2.2 million barrels is forecast in a Bloomberg survey before the report due Wednesday, supplies are set to remain almost 100 million barrels above the five-year average.
U.K. winter gas, for the six months from October, fell as much as 1.2 percent to 45.91 pence a therm ($7.18 a million British thermal units), the lowest since the contract started trading in 2010. U.S. gas for next month slipped 0.5 percent to $2.868 a million Btu.
The pound climbed against all but one of its 16 major peers, gaining 0.4 percent to $1.5615, as minutes of the BOE’s July meeting indicated momentum was building toward the first rate increase in eight years.
source: Bloomberg
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