Wednesday's early afternoon trade: stocks down as Apple, other tech stocks weigh

Wall Street declined in early afternoon trading on Wednesday, with the tech-heavy Nasdaq composite falling more than 1 percent after disappointing results from technology giants including Apple, the world's largest publicly traded company. Apple shares slumped as much as 6.7 percent to $121.99, a day after the iPhone maker's revenue forecast for the fourth quarter fell below expectations.
The stock was the biggest drag on all three major indexes and contributed 40 points to the Dow's overall decline. Microsoft fell as much as 4 percent to $45.35 after reporting its biggest quarterly loss, as the company wrote down its Nokia phone business and demand fell for its Windows operating system.
Yahoo was down 0.8 percent at $39.38 after it forecast lower-than-expected revenue for the current quarter as it struggles to revive its core online advertising business. While markets are near record highs, June-quarter earnings of S&P 500 companies are expected to dip 1.5 percent, according to Thomson Reuters data, well below the 5.9 percent gain forecast on January 1. So far, 70 percent have reported earnings above analyst expectations, above the 63 percent average beat rate since 1994.
However, only 55 percent have topped revenue forecasts, below the 61 percent average beat rate since 2002. US companies are expected to post their worst sales decline in nearly six years in the second quarter, in part due to the strong dollar that reduces the value of US companies' overseas income. "The question now is if the markets are fully valued and can they move higher without earnings growth," said Jerry Braakman, chief investment officer of First American Trust in Santa Ana, California, which oversees $1.1 billion. At 12:47 pm ET (1647 GMT) the Dow Jones industrial average was down 85.82 points, or 0.48 percent, at 17,833.47, the S&P 500 was down 7.21 points, or 0.34 percent, at 2,112 and the Nasdaq Composite was down 45.10 points, or 0.87 percent, at 5,163.02.