The major indexes were mixed. The Dow lost 17 points and the S&P 500 edged lower by a fraction of a point. The Nasdaq, however, gained four points. The price of Apple shares (AAPL) rose by 0.20% as consumers lined up at Apple stores around the globe to buy the new iPhone 5, which went on sale for the first time today. Seventee of the Dow’s 30 components lost ground, led by Coca-Cola Co., which lost 1.5%. Volume was light to moderate, and advancing issues outnumbered decliners by three to two. The prices of Treasuries were mixed, while the price of gold futures gained 0.44% to $1,778.00 an ounce. The price of crude oil on the New York Mercantile Exchange gained 0.5% to $92.89 a barrel.
For the week, the major indexes were down fractionally.
In Earnings News:
- Darden Restaurants, which owns the Red Lobster, Olive Garden, and LongHorn Steakhouse chains, announced earnings increased from 78 cents a share a year ago to 85 cents a share in the latest quarter. Revenue rose 5%, and the earnings results beat Wall Street’s estimate. The price of the shares (DRI) gained 4% in today’s session.
- KB Home reported earnings improved to 4 cents a share in the latest quarter, up from a loss of 13 cents a share one year ago. New home deliveries rose 7%, and revenues increased by 16%, reflecting the gradual improvement taking place in the housing market. The Street was anticipating a quarterly loss for KB Home; the price of the shares (KBH) gained 16% in the session.
In Other Business News:
- General Motors announced it would recall 474,000 cars to fix transmission cables that may break, allowing the vehicles to roll away. The recall applies to autos made between 2007 and 2011 and includes Chevrolet Malibus, Pontiac G6s, and Saturn Auras.
- Apple’s latest mobile phone, the iPhone 5, went on sale as consumers lined up at Apple stores in Asia, North America, and Europe. Analysts are expecting Apple to sell 10 million iPhone 5s by the end of the month even though Apple dropped the Google Map application from the 5 model and replaced it with a new Apple map application, which some observers say is inferior to the Google product.
Enthusiasm for Apple’s new iPhone 5 reminds us that the holiday gift-giving season is rapidly approaching. ShopperTrak, a marketing research firm in Chicago, forecast this week that the shopping season will see 3.3% growth over last year, which is pretty respectable considering the weakness of the economic recovery. The National Retail Federation will issue its forecast in early October. Retailers expect mobile devices such as readers like the Kindle, the iPad, and, of course, the iPhone 5 will be high on many gift lists. Toys R Us just announced its hot toy list for the holidays. Not too many surprises there: Three of the top 10 items are hand-held devices like Tabeo for kids. Also Furby, (remember Furby?) is making a comeback seven years after it disappeared. Not surprisingly, the new Furby interacts with iPad. Really.
I like interactive devices, too, but with a difference. At the top of my list this year is an interactive gadget that isn’t actually for sale yet, but I predict it will eventually go commercial as popular demand builds. The device is called the “Popinator” and it’s the brain-child of a company called Popcorn, Indiana, which makes popcorn and chip-type snacks. The goofballs at Popcorn, Indiana, have devised an intelligent, voice-activated popcorn dispenser. (Can I call them “goofballs” if I say it with genuine gratitude and rank admiration?) The Popinator is a box about a cubic foot square that a snack lover can fill with popcorn and place on a nearby table. Then, whenever the snacker speaks the word “pop,” the device calculates the exact location of the sound and a small cannon in the machine aims and shoots a piece of popcorn into the speaker’s mouth.
Cool. But don’t forget to hold the mouth open and, to be honest, the snacker might have to move the mouth slightly to catch the popcorn because, as we all know, each piece of popcorn has a unique shape that can affect its trajectory. Spitball pitchers understand this principle intuitively, so we might call this machine the R.A. Dickey of popcorn dispensers. And did I mention? If you program your tablet device to say “pop” and hold it still, the Popinator will nail it with a kernel of popcorn. Talk about interactivity. Take that, Furby. Beautiful. I want one, Santa!
Saturday is the first day of fall. Have a great weekend. Watch a football game. Pop some corn. And listen to Brian Jacobsen, who joins me for On the Trading Desk to explain the role central banking is playing to stabilize Europe’s struggling economies.