Apple finally talks about returning some of its cash to shareholders

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By Agence France-Presse | Updated: 8 February 2013 09:32 IST
US stocks rebounded from early sharp losses but finished down Thursday amid some earnings disappointments, while Apple jumped after it said it was reviewing ways to return some of its $137 billion cash pile to investors.

The Dow Jones Industrial Average shed 42.47 points (0.30 percent) at 13,944.05.

The S&P 500 index dropped 2.73 points (0.18 percent) to 1,509.39, while the tech-rich Nasdaq Composite fell 3.35 (0.11 percent) to 3,165.13.

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Trade was lackluster amid some disappointing data showing productivity in the US economy fell in the fourth quarter.

Apple shares added nearly 3 percent, shooting up in the last hour to $468.25, after it issued a statement saying it has been "in active discussions about returning additional cash to shareholders."

Earlier Thursday, hedge fund Greenlight Capital launched an effort to press the company to do more to unleash to shareholders the value of its huge capital stockpile.

"Like many other shareholders, Greenlight is dissatisfied with Apple's capital allocation strategy," Greenlight founder David Einhorn wrote in a letter to Apple shareholders.

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The combination of Apple's low price-to-earnings ration and its $137 billion cash pile "supports Greenlight's contention that Apple has an obligation to examine all options to create and unlock additional value," Einhorn said.

Boeing shares added 1.5 percent despite US transportation safety inspectors suggesting it could be several weeks before they could conclude their probe of a battery fire that forced the grounding of the global 787 fleet.

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BlackBerry gained 5.7 percent after it said the launch of the new Z10 handset in Canada and Britain was very strong.

Akamai Technologies sank 15.2 percent after the Internet technology firm missed forecasts in quarterly revenue figures and gave a disappointing outlook for the current quarter.

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Credit card company Visa slipped 2.3 percent despite reporting better profits than expected and announcing the authorization of a new share repurchase program.

Media giant News Corp. lost 2.3 percent after it cut its profit forecasts because of declining ratings for some of its television programs.

Sprint Nextel fell 0.5 percent after reporting a narrower loss than analysts expected.

Bond prices rose. The yield on the 10-year US Treasury fell to 1.95 percent from 1.97 percent late Wednesday, while the yield on the 30-year Treasury dropped to 3.16 percent from 3.18 percent. Bond prices and yields move inversely.

 

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Further reading: Apple shares, Apple
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