APPL misses, down $31 in the After Hours and taking the NASDAQ with it, down -26 after the close. Now APPL makes up ~18% of that index so it makes sense that it would take the NASDAQ down too. It will be interesting to see where the stock opens tomorrow, especially after they announced poor earnings and revised guidance but there will also be a $2.65 cash dividend which goes "ex" on August 13th (you have to own the stock through that date to be eligible for the payout on August 16th). The disappointment continued with NFLX , -13.62%, after they missed as well. The sentiment right now in Tech does not look so good -- the action tomorrow could be very interesting.
Stock market averages fell on worries about Europe and following a round of uninspiring earnings reports Tuesday. On the other side of the Atlantic, Spain's IBEX tumbled 3.4 percent and Italy's MIB hit a post-EU low after dropping 2.7 percent. Borrowing costs (yields) in Italy and Spain hit new records for a second day amid ongoing anxiety about the debt crisis. A Moody's downgrade of Germany late-Monday along with headlines today that Greece will need more debt restructuring added to the worries. Helping to partially offset the concerns was data that showed a modest recovery in Chinese manufacturing in July. The domestic economic news was light, but included the Federal Reserve Richmond index on manufacturing. It fell 16 points to -17 and much worse than expected. Crude oil added 59 cents to $88.73 after big losses suffered yesterday and gold erased early losses to add $4 to $1581.5 an ounce. The earnings news included disappointing results from AT&T (T), Texas Instruments (TXN), and UPS. Apple Computer (APPL) reports this afternoon (see today's Bullish Flow). At the end of the day, the Dow had suffered its second consecutive triple digit loss, but finished well off session lows. The Dow lost 104 points and up 95 points from its worse levels. The NASDAQ gave up 27.2 points.
Options action in Apple Computer (APPL) was interesting heading into the company's highly-anticipated earnings release. Shares finished down $2.91 to $600.92 in the regular session and total options volume was 737,000 contracts or almost 5 percent of the total options contract volume across the entire market in Tuesday's session. Also interesting, the nine most active contracts in Apple were Weekly 7/27 call options that expire at the end of the week. Weekly 620 calls were the most actives. 23,490 traded. Of the total volume in Apple, 53.5 percent was in Weekly options and 31 percent in August contracts. Therefore, only 15.5 percent of the volume was beyond the August term. Clearly, players were jockeying for position in short-term options ahead of the results. AAPL was recently down $28.42 to $572.50 in extended hours after reporting a $9.32 per share quarterly profit, which missed Street estimates by $1.06.
Bullish trading was also seen in Dendreon (DNDN), Beazer Homes (BZH), and Expedia (EXPE).