Stocks are opening lower as investors show their displeasure at the earnings hitting the market and many are calling this the end of the tech rally. Apple, Microsoft and Yahoo! all opened lower after reporting second quarter earnings.
Apple reported earnings on Tuesday after the market’s close and while the numbers were impressive, the stock sold off on disappointment, dropping 5 percent to trade at $124 a share. Analysts were pleased with the numbers, but traders dumped the stock, shaving $65 billion off of Apple’s market valuation. Total iPhone sales rose 35 percent to sell 47.5 million units, but the market had higher expectations that iPhone users would trade up to the iPhone 6 and only 27 percent did. Apple didn’t give out any information regarding Apple Watch sales, but chief executive officer Tim Cook said they exceeded expectations.
The National Retail Federation delivered sobering news for the retail industry. The retail association now believes retail sales will only have 3.5 percent growth in 2015, lower than its previous forecast of 4.1 percent. The NRF blamed the first part of 2015 for most of the weakness, citing the bad winter weather, problems at the West Coast ports and a strong dollar. The NRF believes sales will steadily increase through the rest of the year. The retail association suggested that households were spending more on services than goods and suggested it may only be temporary. The group also said that falling prices were a challenge for retailer’s bottom lines.
It looks like some of the shopper’s money is going to their pets. Blue Buffalo Pet products went public today, pricing its shares at $20 each, higher than its planned range of $17. Blue Buffalo is the fastest growing pet food company and it specializes in pet foods made from high-quality natural ingredients. It was started in 2003 and has taken a 6 percent share of the $26 billion sector.