European Stocks Drop On Apple's Disappointing Earnings
European stock markets opened in red on Thursday trading after Apple posted disappointing earnings, overshadowing House of Representatives vote to suspend the U.S. government’s debt limit, while Spain’s unemployment rate climbed to a fresh all-time high record.
Tech giant Apple posted disappointing results on Thursday, where the company’s revenue missed expectations despite record sales of its two major products iPhones and iPads.
Apple posted earnings of $13.07 billion, up from $13.06 billion a year earlier. The tech giant said fourth-quarter profit was $13.1 billion, or $13.81 per diluted share.
Apple posted revenue of $54.5 billion, from $46.3 billion in the year ago quarter, however slightly missing $54.7 million estimated.
On the other hand, the House of Representatives overwhelmingly passed a bill on Wednesday to suspend the U.S. debt ceiling until May, averting a potential default crisis and buying time for high-stakes budget negotiations.
The measure would suspend the $16.4 trillion cap on the nation’s borrowing and reset it on May. The House passed the measure on a bipartisan 285 to 144 vote.
The passed bill will now go to the Senate where it is expected to pass and then be approved by President Barack Obama.
As of 03:04 EST, the French CAC 40 fell 0.31% to 3,714.45 points; German DAX fell 0.37% to 7,678.81 points, FTSE 100 traded lower by 0.0169% to 6,188.01 points. STX Europ 600 dropped 0.35% to 287.22 points.
Spain's unemployment rate in the fourth quarter of 2012 shot up to 26.02 percent from 25.02% in the third quarter to record a fresh all-time high.
On Wednesday, the International Monetary Fund trimmed its forecasts for 2013 global growth particularly in the eurozone and Germany.
The IMF stated that the main reason for the cut in growth forecasts was due to the lingering sovereign debt crisis in Europe and the risks it holds to the world output. However, the IMF said that although Europe has seen some progress recently there was still uncertainty surrounding ways to resolve the block’s crisis.
As of 10:25 AM (GMT +2), the EUR/USD hovered around $1.3298 after opening at $1.3315; the pair so far set a session high of $1.3346 and low of $1.3286.
Asian markets are mixed, as weak Japanese trade data offsets fresh optimism over the Chinese economy growth in its manufacturing sector.
Japanese merchandise trade deficit widened more than expectations in December due to the curb in the country's exports due to the yen's strength. Japan’s trade deficit was at 641.5 billion yen in December following 953.4 billion yen total a year earlier. Analysts' median expectations were 522.8 billion yen deficit.
An indicator of China's manufacturing performance hit its highest level in 24 months in January, preliminary results showed. The headline HSBC manufacturing Purchasing Managers' Index (PMI) rose to 51.9 in the month from 51.5 in December.