Apple and Seagate Tumble After Terrible Earnings

Shares of Apple and Seagate plummeted in early trading on Tuesday, after both companies reported disappointing quarters Monday afternoon. In contrast, Dow Jones Industrial Average component Intel rallied modestly, and the index itself had added 56 points as of 11:30 a.m. EST.

Consumers feelingconfident
Part of the reason for the Dow Jones' rally may have been data from the Conference Board showing U.S. consumers were feeling significantly better about the economy than analysts expected. The consumer confidence reading of 80.7 beat the 78.1 estimate.

Consumers might be feeling more positive because the economy is strengthening; they also may be more likely to spend. In either case, a strong confidence reading bodes well for the nation's economy, and by extension the stock market.

Apple whiffs on iPhone sales
Apple shares fell more than 7% early on Tuesday after the company reported earnings for the holiday quarter. While Apple sold 51 million iPhones -- a new record -- it came in short of analyst expectations. Even worse, Apple's management gave weak guidance for the coming quarter, suggesting that its iPhone business -- which still accounts for the vast majority of the company's revenue and profit -- may have peaked.

Apple's management again promised new products coming later this year, but didn't divulge details. With its iPhone business stalling, investors were understandably dumping shares.

Seagate hit by slowing PC market
Shares of hard drive maker Seagate tumbled 11% after the company's earnings came in short of expectations.

Traditional PCs have been in decline for several quarters, weighing on demand for Seagate's hard drives from its primary market. But bulls had hoped that demand for Seagate's products by cloud storage providers would more than offset the weakness in the PC space. That didn't happen; cloud-related demand actually fell.

Intel moves higher
Intel had gained 0.80% by late morning, which was slightly better than the overall market, but there wasn't much news to account for the move.

It's possible that some investors may have projecting Apple's earnings onto Intel -- Apple's Mac sports Intel-made processors, and though Apple's iPhone had a disappointing quarter, Mac sales actually rose 20% from the prior year.

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