Last updated: October 25, 2012 10:27 pm

Microsoft muted after Windows 8 launch

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Microsoft shares were muted on Thursday even as the software company unveiled its latest operating system and first tablet device amid efforts to compete with rival technology companies.

The launch of its Windows 8 operating system and Surface tablet, which will be available to consumers starting on Friday, did little to bolster investor sentiment in the company’s prospects. Shares in the company lost 0.1 per cent to $27.88 on the day.

Microsoft is looking to retain the pre-eminence of its core Office suite of software services as its share of the market has shrunk amid challenges from companies such as Apple and Google . The company’s shares are up just 4 per cent over the past year, compared to a 15 per cent rise in the S&P 500.

Shares in Apple declined slightly in after-market trading as the iPad and iPhone maker said its earnings fell short of analysts’ forecasts for its latest quarter and reduced its forward outlook. Earlier in the day, Apple shares slipped 1.2 per cent to $609.54.

Colin Gillis, analyst at BGC, who rated Apple at “hold” with a price target of $600, said: “Our price target is below the current price levels because while we respect Apple’s success as a company, and enjoy the products, we mention that competition is increasing for the company.”

Mr Gillis cited concerns with the company’s gross margin, the effects of a slowing economy in China and over-optimistic expectations as possible setbacks for the company. Apple shares have risen 50.6 per cent in the year to date.

Amazon lost 2.9 per cent to $221 in after-hours trading after the eretailer reported its first quarterly loss since 2003 and said sales fell below analysts expectations for the period.

Earlier this week, Anthony DiClemente, analyst at Barclays, said market data suggested that the company’s pace of revenue growth may have modestly slowed in August and September.

Meanwhile, analysts at BGC Partners said investors should be concerned with the lack of visibility Amazon gives into parts of business, including sales of its Kindle ereader and the profitability of its hardware products.

Wall Street stocks fluctuated between gains and losses for the day, before settling higher. The S&P 500 rose 0.3 per cent to 1,412.98 to record its first day of gains for the week after three consecutive losing sessions.

Fresh labour market data on Thursday showed that first-time jobless claims decreased last week. Meanwhile, new data on corporate spending showed that durable goods orders saw limited growth in September.

Ford said it would shutter two UK manufacturing plants and cut 1,400 jobs as the US carmaker looked to curb losses from its European business. The company said it expected losses from its European division to be more than $1.5bn for 2012. Shares in the company rose 2.2 per cent to $10.39.

The New York Times Company lost 22 per cent to $8.31 as the newspaper publishing group said total revenues in its latest quarter came in below market forecasts due to a weak climate for advertising.

Zynga shares rose sharply on Thursday after the game developer said it would repurchase $200m worth of shares and expand its business by offering real-money gaming.

Shares in the company, which have fallen heavily since its initial public offering in December, rose 12.3 per cent to $2.39. But analysts at Sterne Agee & Leach said the company would need to take further steps to restore its valuation.

“For any meaningful appreciation, the core business needs to turn around meaningfully and we think there is little visibility on this front currently,” they said in a note to clients. Zynga shares are 74.8 per cent below their IPO price.

The S&P 500 information technology index lost 0.2 per cent.

CME Group , the world’s largest futures exchange operator, lost 2.7 per cent to $55.00 after it reported that net income fell 30 per cent in its latest quarter due to poor levels of trading activity.

Best Buy , the big box consumer electronics retailer, lost 10.3 per cent to $15.17. The company said late on Wednesday that it would reshuffle its senior management and that it expected earnings to continue to decline amid falling sales.

Analysts at Barclays said the warning was “especially troubling” heading into the critical holiday selling season, a period in which the company earns more than 60 per cent of its earnings per share.

The Dow Jones Industrial Average was 0.2 per cent higher to 13,103.68. Boeing shares fell 1.6 per cent to $71.54 as investors weighed the impact of weak macroeconomic conditions on the aircraft manufacturer’s growth prospects.

Cliffs Natural Resources dropped 10.5 per cent to $38.20. The largest US iron ore producer said lower prices and higher production costs eroded profits.

Mead Johnson , the paediatric nutrition company, fell sharply, down 8.6 per cent to $63.53 after the company’s third-quarter earnings slipped due to slowing sales in China.

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