Apple's Plunge Weighs on Markets Weakening Tech

Written by: Joe Deaux 09/11/13 

www.wickedlocal.com

NEW YORK (TheStreet) -- U.S. stocks were falling on Wednesday in early trading as investor disappointment in Apple latest iPhone dragged down the rest of the technology sector. The tech-heavyNasdaq was dropping 0.5% to 3,710.11 as shares plummeted 5% t0 $469.68.

The S&P 500 was slipping 0.2% to 1,681.18 while the Dow Jones Industrial Average were gaining 0.3% to 15,236.06 as IBM said it will sell its customer-care outsourcing business to Synnex Corp. for $505 million. IBM was rising 1.3% $189.05 to while Synnex was surging 18% to $56.71.

Apple 's decline comes a day after the iPhone maker presented two new iPhones that failed to excite investors. One is the iPhone 5C, a unit to be priced as low as $99, while the second unit, the iPhone 5S is an upgrade that adds "Touch ID," a fingerprint sensor built into the home button. Overnight, Apple gained a license fromChina Mobile to begin launching iPhones for the first time on the Asian nation's largest wireless network.

Investors appeared to absorb President Barack Obama's nationwide address Tuesday night on Syria in which he proposed a diplomatic solution with Russia's aid to seize Syria's chemical weapons arsenal thereby avoiding a military intervention in the Middle Eastern nation. Obama did reiterate that, if necessary, a limited targeted strike could be used to achieve a clear goal: "deterring the use of chemical weapons and degrading Assad's capabilities."Credit Suisse on Wednesday downgraded Apple to "Neutral" from "Outperform" as analyst Kulbinder Garcha downgraded the target price to $525 a share. Shares were tumbling 4.8%.

"The Syria address last night by the president, I think, just no surprised there went as expected," said Kent Croft, portfolio manager with Croft Leominster. "There are not any big surprises out there right now."

The U.S. economic calendar includes wholesale inventories for July at 10 a.m. EDT. Economists polled by Thomson Reuters are expecting July inventories to have risen 0.3%, which would reverse the prior month's 0.2% dip.