* Earnings in full swing: 1/3 of Dow components to report
* Major U.S. stock indexes post largest weekly declines in
* Apple to report on Tuesday after the bell
By Angela Moon
NEW YORK, April 19 Apple may have lost nearly
half of its value since its peak in September, but it's still
the talk of the town. Only this time, it's all about how low can
Wall Street would normally be set for a technical rebound
after a drop of more than 2 percent, the worst weekly decline so
far this year. But that could easily change by the time the
iPhone maker reports its earnings, which are due on Tuesday
after the closing bell.
"It's not the $700 stock anymore, but Apple still has huge
weighting on indexes, and it's still the window into the state
of consumers, a sort of reality check," said James Dailey,
portfolio manager of Harrisburg, Pennsylvania-based TEAM
Financial Asset Management.
Wall Street has been recently pressured by a slew of
disappointing economic data and weaker-than-expected earnings
reports from blue-chip companies like IBM.
For the week, the Dow fell 2.1 percent, the S&P 500 also
lost 2.1 percent and the Nasdaq slid 2.7 percent.
"The critical level next week would be 1,540 on the S&P 500,
which is near the 50-day moving average," said Andre Bakhos,
director of market analytics at Lek Securities in New York.
He added that a dip below this mark would bring "additional
weakness to as low as 1,500 levels."
On Friday, the benchmark S&P 500 index closed at 1,555.25.
With the earnings season in full swing, the growth in S&P
500 companies' first-quarter earnings is now estimated at 2.2
percent, up from an April 1 forecast for growth of 1.5 percent,
according to Thomson Reuters data, based on results from 104
companies and estimates for the rest.
Of the companies that have reported, 67.3 percent have
beaten analysts' earnings expectations, while just 43.3 percent
have beaten revenue estimates. Revenue growth is seen at just
0.7 percent for the first quarter over the year-ago period.
About a third of S&P 500 companies and a third of the Dow
components - 10 blue-chip companies - are scheduled to report
earnings next week.
Among Dow stocks, Caterpillar kicks off on Monday,
followed by DuPont, United Technologies Corp and
Travelers on Tuesday.
Boeing and Procter & Gamble report on
Wednesday, followed by Exxon Mobil on Thursday. Chevron
wraps up the week by reporting on Friday.
APPLE BRUISED BY THE BEARS
Once a Wall Street darling, Apple faces tough questions from
shareholders next week. Its stock is down more than 40 percent
from its peak in September.
And for this year alone, Apple is down 27 percent - still
firmly in the grip of a bear market, which Wall Street defines
as the loss of 20 percent or more from a recent peak.
The company is expected to report a mere 8 percent gain in
quarterly revenue, among the weakest displays of quarterly
growth in years, according to average analysts' estimates,
polled by Reuters.
Earnings per share are expected to fall 18 percent as
Samsung Electronics and other hard-charging rivals erode Apple's
market share and put pressure on its margins.
"The market is aware that Apple is not going to report good
numbers. But it will be interesting to see how the stock reacts,
considering that it's already been pressured leading up to the
earnings announcement," Dailey said.
Apple shares closed below $400 on Thursday for the first
time since December 2011. The stock has shed more than $280
billion in market value since peaking at more than $700 a share
in September. On Friday, the stock closed down 0.4 percent at
But Apple, which was once the world's most valuable company,
is trading at nine times trailing earnings. And 45 of 58
analysts polled by Reuters give the stock a "strong buy" or
According to Thomson Reuters Starmine, Apple's intrinsic
value - a price target based on expected growth rates over the
next decade - was about $565 a share.
HOME SALES AND GDP ON TAP
Economic indicators in the coming week will cover housing,
manufacturing and a first look at first-quarter gross domestic
product. In the housing sector, March figures for existing home
sales are due on Monday and new home sales on Tuesday.
Economists polled by Reuters have forecast slight gains in both
March existing and new home sales over February figures.
U.S. durable goods orders for March will be released on
Wednesday, with the forecast calling for a drop in March
following February's gain. Durable goods are manufactured goods,
such as washing machines and refrigerators, meant to last three
years or more.
Thursday's data on weekly U.S. initial claims for jobless
benefits are projected to dip to 351,000 for the latest week.
On Friday, Wall Street will get a snapshot of the broad
economy, measured by gross domestic product, or the output of
all goods and services inside U.S. borders. First-quarter GDP is
forecast to have grown at an annual rate of 3 percent, compared
with growth at an annual pace of just 0.4 percent for the fourth
A final reading for April on U.S. consumer sentiment will
come out on Friday from the Thomson Reuters/University of
Michigan Surveys of Consumers. The forecast calls for a blip
higher to a reading of 73.0 from a previous reading of 72.3.
(Wall St Week Ahead runs every Friday. Questions or comments
on this story can be emailed to: