Financial Dispatch: Apple shines but Wall Street wobbles

Products like Apple's iPhone have lifted the company's quarterly profit and beat Wall Street's forecasts.

Andrew Torgan
CNN Financial News Producer

Stocks on Wall Street struggled amid a deluge of corporate earnings reports. More than a third of the companies that trade on the Dow Jones Industrial Average are reporting this week. Today we heard from Caterpillar, Coca-Cola, Pfizer, DuPont and United Technologies.

And in the tech sector, we got solid results from Apple and Texas Instruments after the closing bell Monday night.

In fact, Apple said that record sales of Macintosh computers and iPhones lifted its quarterly profit and revenue, which trounced Wall Street's forecasts. Apple raked in nearly $10 billion in revenue and $1.5 billion in earnings in what the company says was its most profitable quarter ever.

Mac sales soared 17% from a year ago to 3.1 million units, a quarterly record. And iPhone sales climbed 7% to a record 7.4 million.

But iPod sales slumped 8% to 10.2 million for the quarter, despite slashed prices in September.

Housing starts miss expectations

Disappointing news about the housing market is also weighed on stocks, however.

Construction of new homes edged up slightly in September, helped by a rebound in single-family construction, although the increase was weaker than expected.

Applications for building permits, which are a gauge of future construction activity, also missed predictions. Permit applications fell 1.2%, a troubling sign for future housing projects.

Home prices are forecast to shrink

And if you thought home prices were bottoming out, you may be wrong. In fact, they're expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.

Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm.

If Fiserv's forecast holds, Miami real median home price will tumble to $142,000 by June 2011.

In Orlando, Fla., the second-worst performing market, Fiserv anticipates a 27% price collapse by June 2010, followed by a less severe drop the following year. In Hanford, Calif., prices are estimated to drop 26.9% and continue falling 9.5% in 2011; in Naples, Fla., they're expected to fall 26.8% and then flatten out.

Other notable losers include Las Vegas, where prices have already fallen 54.6% and are expected to lose another 23.9% by June 2010. In Phoenix values have already collapsed by 54% and could fall another 23.4%. In both cities, Fiserv anticipates the losses to continue into 2011, but they will be less than 5%.

College: More expensive than ever

College costs are higher than ever, according to a new report, putting a degree even further out of reach for many Americans.

Tuition and fees at private 4-year schools rose 4.4% in the current school year to $26,273, according to a survey released by the College Board Tuesday.

Charges at public 4-year universities spiked over 6% for both in-state and out-of state students, to $7,020 and $18,548, respectively.

Tuition prices are going up at private schools at least in part because those schools have seen their endowments dwindle. Public schools are suffering from a dip in state funding, which declined 5.7% per student this year.

Holiday shoppers to spend less

Nearly two-thirds of holiday shoppers say the economy will affect their buying this year, with the average amount being spent dropping by about 3%, according to an industry report released today.

The National Retail Federation said 2009 will be the "holiday season of the serious bargain hunter."

Overall, the report said, consumers plan to spend an average of $682.74 on holiday-related shopping, down $22.27, or 3.2%, from $705.01 in 2008.

More than 65.3% of respondents said the recession has forced them to alter their holiday shopping plans in some way.

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