U.S. MARKET AVERAGES

Tech stocks took it on the chin.

Tech barometer Nasdaq declined by 1% and settled at three-month low after third day of sell-off. The tech stock decline was started in the morning with the disappointing revenue from Apple and weak forecast for the current quarter. It did not matter that Apple had its best year ever and now that the music business form app 40% of the Apple’s business. Apple (AAPL: chart) stock fell 4%.

Advanced Micro Devices (AMD: chart) also disappointed traders and stock fell 13% for the day. Despite revenue growth of 44% and earnings growth of 73% and declaring earnings of 18 cents and beating the average estimate of 8 cents per share. Prudential downgraded Intel on news of Advanced Micro gaining market share in the chip industry.

The morning weakness in the tech sector spread to the broader market in the afternoon as oil rose above $64 per barrel. For the rest of the session market waited for the news on trade deficit, jobless claims and weekly petroleum report on Thursday. Market watchers expect record August trade deficit of at least $59 billion and initial claims of jobless to surpass 350,000 for the prior week.

With four stocks falling for every stock rising on New York Stock Exchange, market had a decidedly downward bias and at close generated total trading volume of 2.2 billion shares. On Nasdaq for every stock rising three stocks fell and led trading volume to 1.8 billion shares.

MOVERS AND SHAKERS

Apple (AAPL: chart) reported yesterday fiscal fourth-quarter profit that rose four times as a result of increasing sales of iPod music players and Macintosh PC's, but revenue was behind expectations. In the quarter ended September 24, Apple earned $430 million, or 50 cents a share, on $3.69 billion in sales, compared to a-year-earlier period, when it earned $106 million, or 13 cents a share, on sales of $2.35 billion. Apple dropped 3.4%.

Advanced Micro Devices (AMD: chart) posted a higher-than-expected third-quarter profit, but the company’s stock dropped 11.8% due in part to concerns over valuation. Advanced Micro said that net income rose 73% to $76 million, or 18 cents a share, up from $44 million, or 12 cents, in the same period for 2004. Revenue rose 23% to $1.52 billion.

Motorcycle maker Harley-Davidson (HDI: chart) exceeded analysts forecasts with almost 16% year-over-year increase in third-quarter profits. The company posted third-quarter earnings of $265 million, or 96 cents a share, up from $229 million, or 77 cents a share, in the same period for 2004. Revenue increased in the three months ended September 25 to $1.43 billion from $1.3 billion in 2004. The Milwaukee-based company’s stock added 1.3%.

Chip maker Intel (INTC: chart) dropped 2.2% after the company was downgraded at Prudential to “underweight” from “neutral”. The broker cited problems that may hurt revenue and margins. Prudential also cut its sector rating on chips to “unfavorable”.

Bed, Bath & Beyond (BBBY: chart) was downgraded at CS First Boston to “neutral” from “outperform”. The company is down 2.2%.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed mostly down after the Nikkei fell off a four-year intraday high to close down 0.7%, reflecting consumer confidence decline in September and a decision of the Bank of Japan to leave monetary policy unchanged. Across the region, South Korea’s Kospi tumbled 2.2% on tech shares sell-off after LG Philips released lowered earnings outlook. Shares in Hong Hong dropped 2.2%, while in Australia gained 0.8%.

European markets fell across the region on mixed corporate news and crude oil prices, keeping above $63 a barrel. The German DAX 30 lost 0.3%, the French CAC 40 slipped 0.1%, and London’s FTSE 100 shed 0.3%. The euro slightly advanced against the dollar to trade at $1.2027.

ENERGY, METALS, CURRENCIES

Oil prices hover near $64 a barrel on IEA’s global demand outlook and winter supply concerns. Light sweet crude for November delivery gained 70 cents to trade at $64.30 a barrel on the Nymex.

In European trading gold prices declined from recent highs. In London gold December contract closed at $475.60 per troy ounce, down from $476.05. In Hong Kong gold fell 30 cents to $478.25. Silver closed at $7.83, down from $7.85.

In European trading the U.S. dollar lost ground against its major counterparts after a 17-month high against the yen. The dollar’s decline came ahead of U.S. trade figures Thursday and after Fed Reserve Chairman’s speech. The euro was quoted at $1.2024, up from $1.9993. The dollar changed hands at 114.40 yen, down from 114.42. The British pound was trading at $1.7518, up from $1.7457.

EARNINGS NEWS