Global Economic Worries Sink the Dow
After last week's generally calm markets, stocks are down across the board this Monday. Investors can thank the International Monetary Fund, which lowered global growth forecasts. Managing director Christine Lagarde highlighted the eurozone as the single biggest risk to the world economy, but she shares concerns that the fiscall cliff -- a poison pill put into debt negotiations -- may actually come to pass.
The Dow Jones Industrial Average (INDEX: ^DJI) is faring the best out of the three major indexes, down 29 points, or 0.21%. The S&P 500 is showing a slightly worse 0.34% decline, and the Nasdaq (INDEX: ^IXIC) has tumbled 0.85% as the technology sector weighs it down. Volatility, as measured by the VIX (INDEX: ^VIX) , is up just 2% despite renewed worries coming from Europe.
On the Dow, only Pfizer (NYS: PFE) is up more than 1%, benefiting from a Moody's upgrade to the creditworthiness of the pharma industry, noting that companies have generally mitigated the loss of revenue stemming from a tide of branded drugs going off patent. Pfizer lost Lipitor, the world's best-selling drug, to the patent cliff last year. However, its impact on Pfizer's income statement was barely noticed in recent quarters, and the company's reorganization and strong pipeline have investors excited about the stock's future.
Off the Dow, Apple (NAS: AAPL) is dominating the headlines. Shares of the tech giant are off 2% as the iPhone 5's debut weekend only netted the company 5 million units sold, shy of analyst predictions of 6 million or even 8 million units based on the enormous number of preorders. Apple may have hit those predictions if not for one minor snag: It ran out of iPhones to sell. Fortunately for Apple, many of those turned-away customers won't settle for a rival phone; they will largely wait for stores to restock, so any misses from the weekend should simply turn into deferred sales.
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