After The Close - Stocks were in rally mode from the get-go today, fueled by powerful earnings from market leader Apple (AAPL). The computer and phone maker’s stock has been a must-have for portfolio managers in recent years, and the company did not disappoint on the bottom line. Apple’s products have been a must-have for customers, as well, many of whom have indicated they would not be happy with another brand.
In a case of ``As Apple goes, so goes the NASDAQ, that tech-heavy index rose 68 points, or more than 2.0% in the just-ended session, easily besting a somewhat larger (89) point gain on the Dow Jones Industrial Average on a percentage basis. Three stocks rose for every one falling on the New York Stock Exchange, and the number of stocks reaching fresh 52-week highs far outnumbered those hitting new lows.
The day’s advance occurred against the backdrop of an uneasy calm in Europe. Investors have a feeling there will be more bad news to come from across the Atlantic, but at least there was nothing unnerving to deal with today.
Among sectors, tech led the way, followed by basic materials and consumer cyclical stocks. Dow Chemical (DOW) and Harley Davidson (HOG) were strong performers in the latter two sectors.
This afternoon also brought the latest word from the Federal Reserve, which again indicated that it is in no hurry to raise short-term interest rates. Truth be told, it would have been an earth-shattering revelation if the Fed had suggested otherwise. The central bank did boost its outlook for the economy, although it stands ready to take proactive measures should business conditions falter. Essentially, the Fed plans to keep funding costs low as long as unemployment remains elevated and the housing market remains weak, in an effort to nurse the economy along following the serious financial difficulties encountered just a few years ago.
Tomorrow brings another leg of the earnings parade from Corporate America. Big name companies Amazon (AMZN), Bristol-Myers Squibb (BMY), Exxon Mobil (XOM – Free Exxon Mobil Stock Report), and PepsiCo (PEP) are due to turn in their quarterly report cards, in what could present a mixed picture on the profit front.
All eyes will be on the weekly jobless claims data, as well, which come out prior to the opening bell. The trend in initial jobless claims is not as strongly positive as it was earlier in the year, although it is still expected to come in at a level that suggests reasonably good hiring. Tune in before the opening bell tomorrow for our next update. - Robert Mitkowski
At the time this article was written, the author did not have positions in any of the companies mentioned.
12:15 PM ET - The U.S. stock market is rising today, helped by the latest batch of corporate earnings reports. Specifically, Apple (AAPL) is seeing its stock surge, after the technology giant posted much stronger-than- expected results. Given its size, this move alone is likely responsible for a large portion of the NASDAQ’s advance. Elsewhere, we also heard from a few Dow components. Shares of Caterpillar (CAT - Free Caterpillar Stock Report) are lower today on lack luster sales, although earnings did well. Things are going a bit better for Boeing (BA - Free Boeing Stock Report). The aerospace company posted strong results, sending that stock higher.
The economic news also has been mixed and this may be dampening sentiment somewhat. According to the Department of Commerce, durable goods orders for the month of March declined 4.2%, which was a negative swing from expectations. This figure also stands in contrast to the gain in orders posted in February. Meanwhile, traders are eagerly awaiting the FOMC‘s rate decision and remarks due out in the afternoon.
In commodities, we received a weekly oil inventory report, showing supplies building more than some had anticipated. The price of crude oil, now at about $103 a barrel, had been up earlier but sold off on the news. This may also be the cause of some relative weakness in related equities today.
As we pass the noon hour in New York, the Dow Jones Industrial Average is up 69 points (0.5%); the S&P 500 Index is higher by 14 points (1.0%); and the NASDAQ is showing real leadership, up 56 points (1.9%). Market breadth is favorable, as advancing issues are well ahead of decliners. Furthermore, most of market sectors are advancing. There is leadership in the technology and basic materials stocks. There is relative weakness in the utilities and financial names. Notably, the financial issues are sensitive to news from the Fed, as well as the mounting concerns overseas.
Technically, yesterday’s up move on the S&P 500 was accompanied by decent trading volumes, which is good to see. Today’s rally puts the Index back just above its still upwardly sloping 50-day moving average, located at 1,381. The market has been choppy but moving sideways for the past couple of weeks. This type of consolidation is certainly preferable to a sharper correction, and should allow some traders to take profits in “overbought” stocks. Recent earnings releases and guidance should provide a bit better visibility for many traders, and this also may help provide some stability. - Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Stocks to Watch from The Survey – A number of companies reported quarterly results after the market closed yesterday, none more high profile than Apple (AAPL). The computer and personal electronics powerhouse crushed investors’ sales and earnings expectations, partially due to strong iPhone sales and demand from China. After trading lower yesterday ahead of the release, Apple shares are up sharply in premarket trading. First-quarter results from Chinese Internet search company Baidu (BIDU) were met with considerably less enthusiasm, however, and that issue is lower in the premarket.
Investors also received reports from a number of bellwether industrial companies this morning, namely aerospace and defense giant Boeing (BA – Free Boeing Stock Report) and heavy-construction equipment manufacturer Caterpillar (CAT – Free Caterpillar Stock Report), both Dow-30 components. Boeing’s results surpassed investors’ expectations, and the stock is higher in the premarket. Although Caterpillar delivered better-than-expected earnings, investors were disappointed with its sales figures, causing that stock to slip in the premarket.
Many more companies released financials this morning, including drug producer Eli Lilly (LLY), diversified manufacturer Siemens (SI), and motorcycle company Harley-Davidson (HOG). All three appeared to please investors and the stocks are up in premarket trading. – Matthew E. Spencer
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell - It seems that, save for the euro zone and the unsettling goings on over there, it looks to be all about Apple Inc. (AAPL) and that iconic tech darling's exaggerated volatility these days. For example, after a joy ride lasting a number of years, which culminated in a split-adjusted share price of $644 earlier this year; there was a subsequent pullback to below $560 a share yesterday, as skittish investors awaited this tech behemoth's quarterly earnings release scheduled for after the close of trading. Expectations were for a good posting in the after hours. And, indeed, even the most optimistic of the bulls were not disappointed, as the computer maker crushed profit forecasts, generating a 94% earnings increase on soaring volume, led by gigantic sales of the iPhone 5. The big gain among consumers was China. However, even though Apple, which is now by far the largest market-cap stock in this country, issued somewhat cautious guidance going forward, the stock is jumping in the pre-market this morning.
The gain in Apple shares, with the indicated opening of $615, up from a close yesterday of $560 a share, is helping to propel the NASDAQ futures to a gain of better than 50 points in the pre-market. The Standard and Poor's 500 futures, meanwhile, are better by a more modest seven points. All of this presages a strong market opening over here in less than an hour from now. Such a presumptive early surge in the U.S. market follows some nifty gains in Europe so far this morning, even though, the United Kingdom, which is not in the euro zone, but is certainly a critical component of Europe's aggregate economy, has been declared in a recession, following news of surprise decline in quarterly GDP. In fact, that nation has succumbed to a downturn so close to the conclusion of the last one that some are calling this a double-dip recession.
As for Wall Street, the big Apple news follows closely on the heels of yesterday's mixed session, which saw the Dow Jones Industrial Average head higher on optimism in the wake of better-than-expected quarterly earnings releases from a trio of Dow stalwarts, AT&T (T – Free AT&T Stock Report), 3M Company (MMM – Free 3M Stock Report), and United Technologies (UTX – Free United Tech Stock Report). The Standard and Poor's 500 Index also finished higher, albeit with a more modest proportionate gain, while the tech-heavy NASDAQ, burdened by a further fall in Apple shares as investors awaited the earnings news after the close, declined modestly.
Meantime, there are the dour tidings out of Europe. That is where, in addition to the UK's recession call, we are also seeing rising bond yields and talk of deteriorating economic fundamentals in Spain, Italy, and Portugal, a rumored debt rating downgrade in France, which is now embroiled in a contentious presidential election, and data showing contracting manufacturing activity in Germany, the European Union's largest component.
Then, there is the economic news over here, which can be charitably labeled as mixed to slightly weaker, over the past fortnight. For example, the last 24 hours has seen data showing a decline in new home sales, albeit the report was somewhat better than initially forecast, and a slight dip in consumer confidence. Now, this morning, the Commerce Department has issued data showing that orders for durable goods tumbled in March, falling at their fastest pace since the depths of the last recession in early 2009. Finally, the Federal Reserve is due to conclude its two-day FOMC meeting this afternoon. Expectations are that the lead bank will hold the line on monetary policy, but leave open the possibility of further accommodation down the road should the current upturn falter.
However, for this morning, at least, it is all about Apple, as that stock is front and center in the news and, as noted, should lead equities strongly higher today at the opening. – Harvey S. Katz
At the time of this article's writing, the author had positions in T.