Oct 26, 2012 / 5:49 am
The Toronto stock market headed for a sharply lower open Friday after worse than expected results from Apple Inc. deepened the disappointment about overall third quarter earnings.
"Corporate earnings reports continue to be an issue," said BMO Capital Markets senior economist Robert Kavcic, "and let's just say that forward guidance has been uninspiring at best, especially in cyclical sectors such as industrials and materials."
The Canadian dollar was down 0.3 of a cent to 100.31 cents as commodities declined and the American dollar advanced ahead of the first reading of U.S. third quarter economic growth. Economists looked for gross domestic product to have increased at an annualized rate of 1.8 per cent, a big improvement over the 1.3 per cent pace of the second quarter.
U.S. futures were sharply lower after Apple missed Wall Street earnings expectations for the second straight quarter, as iPad sales fell short of analyst forecasts. Net income in the fiscal fourth quarter was US$8.2 billion, or $8.67 per share. That was up 24 per cent from $6.6 billion, or $7.05 per share, a year ago.
Analysts were expecting earnings of $8.84 per share. Revenue was up 27 per cent from a year ago to $36 billion, against expectations of $35.8 billion.
The Dow Jones industrial futures dropped points to 12, the Nasdaq futures fell 10.5 points to 2,637.5 and the S&P 500 futures lost 10.1 points to 1,398.1.
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