A man talks on a mobile phone in front of an Apple logo outside an Apple store in downtown Shanghai in this September 3, 2012 file photo. Apple Inc is expected to reveal the iPhone 5 during a media event on September 12 in San Francisco, California. REUTERS/Aly Song/Files (CHINA - Tags: SCIENCE TECHNOLOGY BUSINESS)
Today: Apple (AAPL) stock slows down ahead of the expected announcement of the new iPhone while Facebook shares move higher on day CEO Mark Zuckerberg gives an anticipated speech at San Francisco conference. Overall stock movement is positive, pushing the Dow to its highest total since 2007.
Apple stock falls, Siri leader leaves company ahead of iPhone's debut
Apple's pre-iPhone-announcement momentum on Wall Street slowed down Tuesday, as the world's most valuable company saw its stock drop one day before CEO Tim Cook is expected to show off the latest iteration of the popular smartphone.
Apple -- which has a history of trending higher on Wall Street ahead of such announcements, followed by sell-offs that bring the price down -- hit an all-time high early in Monday's session, but declined after and continued that trend Tuesday, with shares falling 0.3 percent to $660.59. The closing price represented a fall of 3.3 percent from the record share price of $683.29 reached Monday.
The Cupertino company is expected to show off a new look to the iPhone on Wednesday at a San Francisco event, increasing the size from 3.5 inches to 4
inches. Apple is also expected to emphasize new features for the phone, including compatibility with the faster 4G, or LTE, wireless networks.One of the most anticipated updates to the new iPhone would be an upgraded Siri, Apple's voice-activation system that has led to widespread interest in the technology. If Apple does renovate Siri, however, it will reach consumers without two of the executives who originally helped develop the technology. Bloomberg News reported Tuesday that Adam Cheyer, a cofounder of Siri and vice president of engineering at the company when Apple acquired it, is leaving Apple's mobile software group.
Siri's former CEO has also left Apple since the acquisition completed, as consumers have complained about the system, which Apple has relentlessly hyped in advertisements for the iPhone 4S, the current iteration of the smartphone.
No matter if Siri gets a major upgrade or any of the other hopes and dreams for the new iPhone come true, analysts expect that Apple's cash cow will continue to produce. The iPhone accounts for nearly half of Apple's total revenue last year and an even bigger percentage of its profits, and Piper Jaffray analyst Gene Munster expects the company to sell up to 10 million of the gadgets before the end of this month, despite an expected release date that would provide just more than a week to hit that number.
"We believe that if the 21st is the actual ship date, Apple could sell 6 million to 10 million iPhone 5s in the final week of September barring supply issues," Munster wrote last week.
Anticipation has grown to such a fever pitch that JP Morgan posited in a note that iPhone sales could push the United States' economic growth up my as much as 0.33 percent on an annualized basis, after GDP grew by only 2 percent last quarter. NPR pointed out that the economic analysis has a flaw, though: It is based on an assumption that the money consumers spend on iPhones would not be spent elsewhere.
If Apple is able to sell an incredible amount of iPhones in its first week-plus of availability, it's stock price could shoot past $700 for the first time in company history, pushing its U.S. record market capitalization even higher. However, with Apple's domination in mobile gadgetry already so complete, it could take an astonishing accomplishment to expand the company's reach and wow investors.
"It is getting tougher (for Apple) to expand the market share," Gartner Research analyst Carolina Milanesi told Reuters.
Forrester analyst Sarah Rotman Epps agreed, saying that Apple must continue to offer breathtaking technology innovations to maintain its throne.
"The iPhone is the make-or-break product for Apple," Rotman Epps told Bloomberg. "Apple has the undeniable lead, but to stay on top they need to keep innovating."
Mark Zuckerberg's speech in S.F. pushes Facebook stock back above $20
While Apple has become the most dominant single stock in the market during the past year, Facebook has fallen from its record-breaking initial public offering to become a cautionary tale for tech startups considering going public. The Menlo Park social network's wounded stock price received a bump Tuesday, however, as cofounder and CEO Mark Zuckerberg told a San Francisco crowd that the company's mobile efforts would earn more than the eponymous website.
While admitting that the performance of his company's stock "has obviously been disappointing," Zuckerberg said that users of Facebook's apps on the iPhone and other mobile gadgets will "make a lot more money" for the world's most popular social network.
The 28-year-old CEO's words in his first public appearance since the IPO were likely music to investors' ears, as Facebook's inability to properly monetize its popular mobile app has been a target of critics in the investment community since before its public debut. Facebook eventually sold its first minting of shares at $38 apiece, creating a record valuation of $104 billion, but that price has plummeted since and dropped below $18 for the first time last week.
Investors seemed excited even before Zuckerberg's talk, pushing the stock price up 3.3 percent to $19.43 at the close; as Zuckerberg spoke, the stock pushed up even higher, eventually surpassing $20 a share in after-hours trading.
Dow Jones nears five-year high, b ut tech stocks struggle ahead of Fed meeting
The market increased overall on Tuesday, with the Dow Jones industrial average reaching its highest closing price since 2007 as investors anticipate economic action from the Federal Reserve, which begins meeting Wednesday.
"The market is anticipating that there will be some stimulus move on the part of the Fed," John Praveen, chief investment strategist at Prudential International Investments Advisers, told Bloomberg News.
Tech stocks did not receive the same positive movement as the rest of the market, however, as the tech-heavy Nasdaq gained the least of the three major U.S. stock indexes and the SV150 index of Silicon Valley's largest tech companies fell 0.2 percent.
One of Wall Street's biggest losers of the day was a company that has navigated the post-IPO waters much better than Facebook. Palo Alto Networks, a Santa Clara-based security company, fell 7.2 percent one day after announcing its first quarterly earnings report as a public company, despite generally positive numbers. On the other end of the post-IPO spectrum, Zynga fell another 1.1 percent despite not having much lower to go -- the San Francisco online-gaming company closed at $2.79 after its chief marketing and revenue officer left the company. Google (GOOG) also had a rough day, falling 1.2 percent despite announcing a new YouTube app for the iPhone, as Apple looks to stop offering the video-viewing application as a default.
On the plus side, Hewlett-Packard (HPQ) gained 3 percent one day after increasing the size of its latest round of layoffs, Intel (INTC) gained 0.3 percent as its showed off a new round of Ultrabooks, though that was much less than rival Advanced Micro Devices' jump of 8.1 percent.
Silicon Valley tech stocks
Up: AMD, Yelp, Facebook, Jive, HP, VMware, Netflix (NFLX), Juniper, Tesla, Nvidia, Adobe (ADBE), SunPower
Down: Palo Alto Networks, Splunk, Google, Zynga, Gilead, Cisco (CSCO), eBay (EBAY), Apple
The tech-heavy Nasdaq composite index: Up 0.51, or 0.02 percent, to 3,104.53
The blue chip Dow Jones industrial average: Up 69.07, or 0.52 percent, to 13,323.36
And the widely watched Standard & Poor's 500 index: Up 4.48, or 0.31 percent, to 1,433.56
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.
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