[NEW YORK] US stocks fell in early trading on Wednesday, with the tech-heavy Nasdaq composite falling more than 1 per cent after disappointing results from technology giants including Apple, the world's largest publicly traded company.
Apple shares slumped as much as 6.7 per cent to US$121.99, a day after the iPhone maker's revenue forecast for the fourth quarter fell below expectations.
The stock was the biggest drag on all three major indexes.
Microsoft fell as much as 4 per cent to US$45.35 after reporting its biggest quarterly loss, as the company wrote down its Nokia phone business and demand fell for its Windows operating system.
Yahoo was down 2.7 per cent at US$38.66 after it forecast lower-than-expected revenue for the current quarter as it struggles to revive its core online advertising business.
While markets are near record highs, June-quarter earnings of S&P 500 companies are expected to dip 1.5 per cent, according to Thomson Reuters data, well below the 5.9 per cent gain forecast on Jan. 1.
So far, 70 per cent have reported earnings above analyst expectations, above the 63 per cent average beat rate since 1994.
However, only 55 per cent have topped revenue forecasts, below the 61 per cent average beat rate since 2002. U.S. companies are expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar that reduces the value of US companies' overseas income.
"Underwhelming reports from headline companies is moving the market today as the focus shifts from the macro to micro," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "There is concern regarding the lack of organic revenue growth and the strong dollar which will continue to be a drag as we head into the second half of the year but that effect should moderate over time." Adding to the weakness, commodities resumed their downward spiral with gold and oil prices under pressure.
At 9:46 am ET, the Dow Jones industrial average was down 21.68 points, or 0.12 per cent, at 17,897.61, the S&P 500 was down 5.48 points, or 0.26 per cent, at 2,113.73 and the Nasdaq Composite was down 43.85 points, or 0.84 per cent, at 5,164.28.
Five of the 10 major S&P 500 sectors were lower with the technology index leading the decliners with a 1.36 per cent fall.
Dow component Coca Cola was up 0.4 per cent at $41.36 after the company reported better-than-expected results but said it may spend lesser to buy back shares this year.
Boeing was up 2.1 per cent at $148.1 after the company reported a better-than-expected quarterly profit, helped by booming demand for commercial aircraft.
Thoratec jumped as much 9.4 per cent to record high of $63 after St Jude Medical agreed to buy the smaller rival for US$3.4 billion. St Jude rose 1.2 per cent to $77.56.
Data expected on Wednesday includes existing home sales data. Home sales, which reached a 5-1/2-year high in May, are expected to have risen 1.2 per cent at an annual rate of 5.40 million units in June. The data is expected at 10 am ET (1400 GMT).
Declining issues outnumbered advancers on the NYSE by 1,584 to 1,103. On the Nasdaq, 1,352 issues fell and 932 advanced.
The S&P 500 index showed 16 new 52-week highs and 30 new lows, while the Nasdaq recorded 30 new highs and 73 new lows.