Apple's new iPad mini, and surging U.S. oil production lead our roundup of the day's top business stories
Weak Earnings Send Stocks Plummeting
Stocks closed sharply lower Tuesday following new reports of weak earnings from major companies, USA Today reports. The Dow Jones industrial average suffered its worst one-day loss since June 21 and the Nasdaq composite index closed below the psychologically significant 3,000 for the first time since Aug. 6. At the trading session's end on Tuesday, the Dow finished 243.36 points lower, or 1.8 percent, to 13,102.53. The losses of the last three days have not wiped out the gains of the 2012 stock rally. The Dow is up 7.2 percent for the year, the S&P 500 is up 12.4 percent, and the Nasdaq is up 14.8 percent.
Apple Unveils iPad Mini
Apple Inc enters the smaller-tablet market on Friday when its 7.9-inch iPad Mini will be available for purchase. Priced at $329 for a wi-fi only model, the iPad mini is more pricey than predicted, which analysts question whether it will curb demand. Apple is attempting to compete with such small tablet bestsellers as the Amazon.com’s Kindle, as well as protecting its lead in the larger tablet market from rivals such as Samsung, Reuters reports. The iPad mini has most of the functions and features as its full-size counterpart. There are also questions on whether the new gadget will lure consumers away from the signature $499 10-inch iPad. At a product launch Tuesday, Apple also announced a fourth-generation full-sized iPad just six months after unveiling a third generation device. The latest tablet, which also will sell for $499, is faster and slimmer and comes just days before Microsoft is due to show off its own "Surface" tablet.
Like! Facebook Earnings Beat Expectations
Facebook, the world’s dominant social media network reported earnings and revenue that topped Wall Street's expectations on Tuesday in its second quarterly report since its initial public offering in May, CNBC reports. The company reported a net loss of $59 million, or 2 cents per share, compared with net income of $227 million, or 10 cents a share a year earlier. The company posted third-quarter earnings excluding items of 12 cents per share.Revenue increased to $1.26 billion from the $954 million that it reported in filings with the Securities and Exchange Commission for its year-ago quarter. Advertising revenue shot up 36 percent to $1.09 billion, but revenue from its payments and other businesses increased just 13 percent to $176 million. The company said it generated 14 percent of advertising revenue from mobile.
China Attracts More Investment Than the U.S.
Move over America. China attracted more foreign investment than any other country in the world in the first six months of 2012 – a distinction enjoyed by the U.S. since 2003, The Wall Street Journal reports. China has attracted $59.1 billion in foreign investment in the first two quarters of the year, compared to $57.4 billion for the U.S., according to data released Tuesday by the United Nations Conference on Trade and Development. UNCTAD also reported that the flow of foreign investment was equally divided between developed and developing countries for the first time.
The Fed Is Likely to Stay the Course
When Federal Reserve policy makers adjourn their two-day meeting this afternoon, they are expected to affirm the policy announced at their last meeting six months ago, according to The Associated Press. Members of the Federal Open Market Committee will likely reaffirm their intent to keep interest rates near record lows through the mid-2015 and continue purchasing $40 billion in mortgage bonds each month in efforts to stimulate the housing market. According to The AP, the Fed will give these measures more time to work and will refrain from announcing any new stimulus measures today.
U.S. Oil Production Surges
U.S. oil production is expected to increase by 7 percent this year to an average of 10.9 million barrels a day, in the biggest annual gain since 1951, The Associate Press reports. The fourth consecutive year of increasing output puts the U.S. on track to overtake Saudi Arabia in oil production, according to The AP. The U.S. Department of Energy predicts production of liquid hydrocarbons, including oil and biofuels, will average 11.4 million barrels per day next year. The output would set a new record for the U.S. and falls just below Saudi Arabia’s output of 11.6 million barrels a day. Citibank forecasts the U.S. production could reach 13 million to 15 million barrels per day by 2020, The AP reports, restoring the U.S. to the spot of world’s largest oil producer, a position it last held in 2002. Despite the increase in production, Americans will still need to import oil to satisfy their current 18.7 million barrel per day consumption.