Stocks Rocket Higher After Apple Results Crush Forecasts
FOX Business: The Power to Prosper
A blockbuster earnings report from Apple boosted sentiment across Wall Street, sending the markets whizzing deep into positive territory.
Today's Markets
The Dow Jones Industrial Average gained 89.2 points, or 0.69%, to 13091, the S&P 500 rose 18.7 points, or 1.4%, to 1391 and the Nasdaq Composite soared 68 points, or 2.3%, to 3030.
Apple, the world's biggest publicly-traded company by market capitalization, earned $11.6 billion in its fiscal second quarter on sales of $39.2 billion, easily beating analysts' expectations. The iPad-maker's shares, which had seen selling pressure over the previous 11 trading days, soared some 8.9% on Wednesday. The gain on the day was the biggest on a percent basis since November 2008 and added $46.4 billion in market capitalization.
The company makes up 29% of the closely-watched Nasdaq 100 index of non-financial companies and 4% of the S&P 500, according to Reuters, meaning moves can have an outsized affect on Wall Street as a whole.
Overall, the technology sector performed the best on the day, followed by basic materials stocks. Indeed, the Nasdaq had its best day of the year.
The yield on the 10-year Treasury bond jumped 0.026-percentage point to 1.989% as traders shed the safe-haven asset. In a sign of the breadth of the rally, more than 75% of the S&P 500 closed in the green and there were more than three trades in advancing shares for every one in declining shares on the New York Stock Exchange.
Also on the earnings docket were results from two Dow heavyweights Boeing (NYSE:BA) and Caterpillar (NYSE:CAT).
Caterpillar posted first-quarter earnings of $2.37 a share on revenue of $15.98 billion. Analysts were looking for $2.13 a share on $16.22 billion. The world’s biggest heavy machinery maker also said it expects to earn about $9.50 a share for the full year, weaker than consensus estimates of $9.54. Shares were down more than 2%, costing the Dow 38 points.
Boeing unveiled first-quarter earnings of $1.22 a share on sales of $19.4 billion, handily beating expectations of 94 cents on $18.37 billion. The airplane maker also lifted its full-year forecast to a range of $4.15 a share to $4.35 from $4.05 to $4.25.
Overall, first-quarter earnings season has been strong, analysts have said, boosting hopes that American firms may be able to dodge the malaise in Europe and slowing growth in China.
The day was a busy one on the economic front as well.
Equities had little response to the Federal Reserve's monetary policy statement that came largely in-line with expectations. The central bank reaffirmed its pledge to keep interest rates at extraordinarily low levels until late 2014, saying that global financial strains still pose a risk to the U.S. economy. It also largely brushed off inflation concerns, saying that while inflation has risen, it is still within or below target levels and expectations remain anchored.
Separately, Fed officials increased their projections for 2012 economic growth and core inflation, and lowered their forecast for the unemployment rate. The projections also showed seven officials at the Federal Reserve expect the central bank to hike interest rates in 2014, up from five when projections were released in January.
The Commerce Department reported orders for long-lasting goods plunged 4.2% in March, the biggest decline since January 2009 and a significantly steeper drop than the 1.7% expected. Excluding the transportation segment, orders were down 1.1%. Economists had been expecting a 0.5% gain.
Energy futures were mixed after volatile trading following a mixed weekly inventory report from the Energy Department. Oil inventories rose by 3.98 million barrels last week, a bigger build than the 2.7 million that analysts expected. However, gasoline inventories tumbled 2.24 million barrels, a wider draw than the 900,000 expected.
Crude oil traded in New York gained 57 cents, or 0.55%, to $104.12 a barrel. Wholesale New York Harbor gasoline dipped 0.11% to $3.16 a gallon.
In metals, gold slid $1.50, or 0.09%, to $1,642 a troy ounce.
Foreign Markets
European blue chips rallied 1.7%, the English FTSE 100 rose 0.16% to 5719 and the German DAX soared 1.7% to 6705.
In Asia, the Japanese Nikkei 225 climbed 0.98% to 9561 and the Chinese Hang Seng slumped 0.15% to 20646.