Stocks are down sharply today thanks to worse-than-expected earnings from Bank of America Corp (NYSE:BAC) and fears that Apple Inc.(NASDAQ:AAPL)‘s report may similarly disappoint. With roughly an hour left in the trading session, the Dow Jones Industrial Average (INDEXDJX:.DJI) is lower by 167 points, or 1.13%.
Given the absence of economic data, it’s safe to conclude that today’s decline is attributable to one thing: earnings. After yesterday’s closing bell, Intel Corporation (NASDAQ:INTC) reported that its quarterly earnings plunged by 25% from the same time period last year and that its revenue contracted by 2.5%.
And yet shares in the chip maker are nevertheless moderately higher in afternoon trading. What gives?
The answer is that Intel’s results were roughly in line with analysts’ estimates. In addition, despite the fact that personal-computer sales purportedly fell 14% over the quarter, Intel Corporation (NASDAQ:INTC)’s PC processor division only saw its top-line erode by 6%. As my colleague Anders Bylund noted, this wasn’t wholly unexpected, given that the company never warned investors of an impending meltdown.
Unfortunately, Bank of America Corp (NYSE:BAC) is having the exact opposite experience today. Namely, despite the fact that its net income improved by a factor of four over the first three months of the year, its shares are tanking, down 5.3% at the time of writing.
The reason is that, unlike Intel Corporation (NASDAQ:INTC)’s, Bank of America Corp (NYSE:BAC)’s results came in below the consensus forecast. While analysts had estimated that the bank would earn $0.22 per share, its actual earnings came in at $0.20 per share. Suffice it to say, the market’s not pleased.
And speaking of being displeased, shares of Apple fell below the $400 threshold for the first time since 2011, erasing nearly a year and a half’s worth of gains. The catalyst was an announcement from Cirrus Logic, Inc. (NASDAQ:CRUS) , a supplier of audio chips for the iPhone and iPad. According to the Associated Press, Cirrus Logic, Inc. (NASDAQ:CRUS) said that “sales of a particular chip are slowing down as an unnamed customer [presumed to be Apple Inc.(NASDAQ:AAPL)] moves to a newer component.”
The implication, according to an analyst cited by the AP, is that Apple Inc.(NASDAQ:AAPL) is unlikely to launch a new iPad Mini in the April-to-June period. For investors, it’s important to keep in mind that this is purely speculation and rumor. We should get a better feel for things on Tuesday when the tech giant itself reports earnings.
The article Bad Earnings and Apple Rumors Send Stocks Reeling originally appeared on Fool.com is written by John Maxfield.
John Maxfield owns shares of Bank of America, Apple, and Intel. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple, Bank of America, Cirrus Logic, and Intel.
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