Published December 06, 2012
NEW YORK – Stocks were little changed in choppy morning trading on Thursday as upbeat guidance from Broadcom partially offset weakness in Apple shares, while traders kept an eye on fiscal negotiations in Washington.
Extending Wednesday's 6.4 percent decline, Apple was trading down 0.7 percent at $535 early on Thursday, after falling as much as 3.7 percent at the open, which brought the market capitalization of the world's largest publicly traded company down to below $500 billion briefly. In September, it was capitalized at a record $663 billion.
Broadcom shares led the advance in chip makers with a 2.1 percent gain, one day after it forecast for fourth-quarter revenue at the high end of its target range, citing slightly better-than-expected sales in its mobile business.
The PHLX semiconductor index rose 0.4 percent.
Budget discussions continued to be a key focus for investors. President Barack Obama said there could be a quick deal to avert the "fiscal cliff" - tax hikes and spending cuts set to begin next year, possibly driving the U.S. economy back into recession - if Republican leaders agree to raise tax rates for those making more than $250,000 a year.
While Republican leaders in the House of Representatives insist that raising tax rates on the rich is a no-go, some GOP lawmakers now see it as inevitable to avoid the fiscal cliff.
"There are no real triggers here. It is just positioning going on for year-end, and this big decision" on the fiscal cliff, said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
He said Apple's weakness was taking a toll on the market and expects equities to continue trading choppily through the day.
The Dow Jones industrial average fell 17.89 points, or 0.14 percent, to 13,016.60. The S&P 500 dropped 1.78 points, or 0.13 percent, to 1,407.50. The Nasdaq Composite Index gained 2.89 points, or 0.10 percent, to 2,976.59.
Apple Inc's rank in China's smartphone market fell to No.6 in the third quarter as it faces tougher competition from Chinese brands, research firm IDC said Thursday. Apple's 6.4 percent drop on Wednesday was its worst daily performance since December 2008 and dragged down the Nasdaq Composite.
Shares of Apple were down 0.7 percent at $535, after earlier falling more than 3 percent.
Sirius XM Radio shares rose 2.2 percent to $2.83 after its board approved a $2 billion stock repurchase and issued a special dividend, giving a big payout to its largest shareholder, Liberty Media .
Without action from Congress in coming weeks, tax cuts on capital gains and dividends will expire at the end of 2012.
Garmin shares rose 5 percent to $41.71 after Standard & Poor's said it would add the navigation device maker to its S&P 500 index. Garmin will replace R.R. Donnelley & Sons after the close of trading on December 11.
Several European equity benchmark indexes hit 2012 highs, boosted by hopes a U.S. budget deal will be reached before the year-end, and that the worst of Europe's debt crisis might be over.
(Additional reporting by Herbert Lash; Editing by Bernadette Baum)