July 24 - Summary of business headlines: Apple results fall far shy of expectations; Netflix new subscriber numbers cause investors to tune out; AT&T profits beat as smartphone subsidies cut; Blue chips post third triple-digit loss in a row. Conway G. Gittens reports.
It's the kind of triple play Wall Street doesn't like to hear: blue chips posting a triple-digit loss for a third day in a row, as economic melancholy sets in. The Dow slumped 104 points but closed off the lows of the day. Apple adds to the downbeat tone of earnings season. It sold fewer iPhones than expected as customers prepare for iPhone 5 likely to come later this year. Since iPhones account for about half of Apple's quarterly revenues - sales and profits for the quarter missed forecasts by a wide margin. A 50 percent gain in the stock since the start of the year, makes Apple the stock of the day, but expect a pullback when the opening bell sounds on Wednesday. Netflix was also a let down. The company added only 530,000 new streaming subscribers in the second quarter, which was below high-end guidance of 800,000. That's disappointing given a Facebook posting by its CEO earlier this month that viewers watched a record 1 billion hours of streaming media. Aside from the subscriber numbers: profits were way better-than-expected and revenues were up as forecast. AT&T is cutting back on subsidies for smartphones like the iPhone. That extra cash helped the No. 2 U.S. mobile service provider beat higher profit forecasts. But customers switching from unlimited data to tiered data plans didn't boost sales as much as anticipated. United Parcel Service - delivering a lower outlook for the year. A sharp drop-off in more profitable shipments from Asia, a big problem for the world's top package shipper. And DuPont is tempering full-year expectations with strength in the Americas still managing to offset what's going on everywhere else. On the European front - Germany could lose its AAA credit rating, Moody's warned the day before, which could cause borrowing costs for Europe's biggest and most stable economy to rise, potentially throwing Europe further into chaos. Shares ended down but most of the pain was felt in Spain and Italy. Conway Gittens, Reuters