Apple shares fall despite record profits

Global stocks fell on Wednesday (July 22nd) as the fallout from Apple’s disappointment fed into equity markets.

Tech stocks were dragged lower as Apple’s shares fell by seven per cent in after-hours trading despite the firm selling 47.5 million iPhones in the quarter to June 27th, up 35 per cent on a year ago.

Mac computer sales were up nine per cent to 4.8 million, helping profits rise by 38 per cent to $10.7 billion.

But disappointment about Apple’s fourth-quarter forecast spooked investors, wiping $66 billion off the value of the company and unravelling a tech rally sparked last week by Google.

Microsoft shares fell by four per cent after it reported its largest ever quarterly net loss, caused by the $7.5 billion writedown after the purchase of Nokia’s handset unit. Yahoo shares were also lower as it too offered a less optimistic fourth-quarter forecast than many had hoped for.

Futures on the Nasdaq 100 Index fell one per cent, undoing an eight-day rally that had seen the tech-focused index rise 7.5 per cent to a 15-year high.

The Dow Jones was down one per cent - its biggest fall in two weeks - with IBM dropping by almost six per cent after another poor quarter. United Technologies slid seven per cent after cutting its full-year earnings forecast for the third time this year.

Meanwhile, shares in miners were down as the commodity price crunch continued to show.

Equity markets in Europe were broadly lower on Wednesday after the weak corporate earnings data from the US the day before. They also tracked a poorer mood overnight from Asia, where Japan’s Nikkei 225 dropped 1.2 per cent, ending a six-day rally, and Hong Kong’s Hang Seng fell by one per cent.

The flight from equities boosted bonds, with the yield on US 10-yr Treasury notes easing.

In forex, the euro was up at a one-week high against the dollar before another vote on Greece’s bailout. Sterling was up half a per cent against the dollar.