Apple finishes above $600 for 1st time

Apple surges on its decision to resume a dividend and buy back $10 billion in shares. The Dow and S&P 500 rise modestly. Crude oil tops $108; interest rates rise. Could Sprint be headed to bankruptcy?

By Charley Blaine Mar 19, 2012 1:28PM
Charley BlaineUpdated: 8:15 p.m. ET.

Stocks finished modestly higher in a rally fueled by excitement over Apple's (AAPL) decision to start paying a dividend for the first time since 1995 and hopes for the economic recovery.

Apple also announced it sold more than 3 million of its new iPad tablets since Friday. Shares closed up $15.53 at $601.10, its first close above 600 and were trading at $604.10, up $4 after hours. The shares are up 48.4% this year. Apple's gain added more than 13 points to the Nasdaq-100 Index ($NDX). The index rose 20 points to 2,733, its highest close since December 2000.

The market's gains were also fueled by hopes for the economy. Bank stocks were higher, with Bank of America (BAC) briefly topping $10 for the first time since August. Crude oil in New York moved above $108 a barrel, and interest rates also were higher.

But Walt Disney (DIS) said late today it was taking a $200 million write-down for its science-fiction movie "John Carter." The loss was bigger than some had expected and will result in an operating loss of $80 million to $120 million in its fiscal-second-quarter, which ends March 31. Shares were down 38 cents, or 0.8%, after hours to $43.16. The shares had risen 25 cents to $43.44 in regular trading.

The Dow Jones industrials ($INDU) closed up 7 points to 13,239. The Standard & Poor's 500 Index ($INX) rose 6 points to 1,410, and the Nasdaq Composite Index ($COMPX) climbed 23 points to 3,078. It was the S&P 500's best finish since May 20, 2008 and the Nasdaq's best close since Nov. 15, 2000.

Article continues below.
After the close, Adobe (ADBE) shares fell $1.55, or 4.5%, to $32.96. The company cut its second-quarter guidance to 57 cents to 61 cents on a non-GAAP basis. Analysts had been projecting 64 cents. Revenue is expected at $1.09 to $1.14 billion; the Street has been penciling in $1.18 billion.

The company expects a stronger second of the year, however, with revenue up 6% to 8%, compared with the Wall Street estimate of 4% to 6%. In fiscal 2011, Adobe's revenue was $4.22 billion.

Stocks on Tuesday face the February report on housing starts and building permits. Key earnings are due from Tiffany (TIF) before the open and Oracle (ORCL) after the close.

Futures trading suggests the major average will open slightly higher.

The market holds its own but is getting frothy.
The Dow and the S&P 500 had their eighth gains in nine sessions. The Nasdaq's gain was its seventh in nine sessions.

The Dow is up 2.2% for March with nine trading days left. The S&P 500 is up 3.2% for the month, with the Nasdaq up 3.78%. The Dow Jones Transportation Average ($DJT), which finished 9 points higher at 5,360, are up 4% this month.

The major averages are nearing levels when they can be considered overbought. The 200-day moving averages for the Dow, S&P 500 and Nasdaq are all above 10%, which is one signal of frothiness.

All three are sporting relative strength index values above 64. A relative strength index measures the current price against changes over time. A reading above 70 is a signal an index or stock is overbought.

Apple, meanwhile, is selling at 46% above its 200-day moving average, and its RSI is at 81.7.

If the market blows off -- and it may well do so -- Apple may well lead the tumble.

Energy, metals prices move higher
Meanwhile, interest rates and energy and metals moved higher.

The 10-year Treasury yield was up to 2.379% from Friday's 2.298%. The yield was 1.98% on Feb. 29.

Crude oil (-CL) in New York settled up $1.03 to $108.09 a barrel today, the highest settlement since $108.84 on March 1. Brent crude, the benchmark North Sea oil, was off 13  cents to $125.65 a barrel. AAA's national average price for gasoline was 3.842 a gallon, up slightly from Sunday and 1.1 cents from Friday.

Gold
(-GC) settled up $11.50 to $1,667.30 an ounce. Silver (-SI) had risen 35.1 cents to
$32.955 an ounce. Copper (-HG) ended up 3.1 cents to $3.909 an ounce.

Apple makes a decision on its cash horde

Apple said it would pay a quarterly dividend of $2.65 a share starting in its fiscal-fourth quarter, which starts July 1. It also plans to buy back to $10 billion of its common stock starting in fiscal 2013, which starts on Sept. 30.

The dividend would Apple's first since 1995.

The company has been sitting on cash and short-term and long-term securities totaling nearly $98 billion at the end of December, and investors and analysts have been calling for the company to find a way to make the cash do more -- or return some of it to shareholders. The cash has been earning maybe 1% a year.

The late Steve Jobs had opposed a dividend, but Tim Cook, who succeeded Jobs in August 2011, had promised a review of the cash buildup.

The cash position alone was larger than the market capitalizations of all but the world's 52 largest companies. Had Apple wanted, The Wall Street Journal noted today, it could buy Dell (DELL), Yahoo (YHOO), Motorola Mobility (MMI), Best Buy (BBY) and Netflix (NFLX), offering a 10% premium on each.

The only catch is that two thirds of the cash kept overseas. To bring it back to this country would trigger U.S. corporate income taxes.

The company said it wasn't considering splitting the stock. Investors didn't think it would do much for the shares.

Energy prices -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$108.09

$107.06

0.95%

9.37%
(per barrel)











Heating oil (-HO)

$3.2613

$3.2819

1.73%

11.91%
(per gallon)











Natural gas (-NG)

$2.3510

$2.3260

-10.13%

-21.34%
(per mil. BTU)











Unleaded gasoline (-RB)

$3.3678

$3.3569

3.40%

26.73%
(per gallon)











Brent crude 

$125.71

$125.81

2.49%

17.07%
(per barrel)











Retail gasoline

$3.8420

$3.8380

2.98%

17.28%
(per gallon; AAA)












Housing Day 1: Perhaps a letdown
Home builders are feeling better -- but hardly great -- about their business.

The Wells Fargo/NAHB builder sentiment index came in at 28 for March, unchanged from February, although February was revised lower from an original estimate of 29. There had been hopes the index would climb over 30 for the first time since May 2007.

The index is up 100% from September 2011, when it was at 14. That's a big improvement But to suggest housing is growing again, the index needs to top 50.

In other words, builders think business is starting to look better and should look better in six months or so.

Homebuilding stocks were mostly lower today, with PulteGroup (PHM) down 7 cents to $9.22. Ryland (RYL) was off 17 cents to $20.17. D.R. Horton (DHI) slid 9 cents to $15.94.

Also due this week: housing starts and building permits on Tuesday, mortgage applications and existing-home sales on Wednesday; the Federal Housing Finance Agency's January price index, due Thursday; and new-home sales on Friday.

Financials lead the market
Banks and other financial stocks are leading the market, with utilities, health care and consumer staples stocks the laggards.

 American Express (AXP) and JPMorgan Chase (JPM) were among the best performers among the 30 Dow stocks, up 72 cents to $57.27 and 43 cents to $45, respectively.

In addition, Citigroup (C), Wells Fargo (WFC) and KeyCorp (KEY) were among the strongest financial performers.

Bank of America was hit by profit-taking and fell 27 cents to $9.53. It topped $10 for the first time since August after Morgan Stanley analyst Betsy Graseck boosted her price target on the stock. An additional reason for the selling was chatter the company might sell new shares, but the bank denied that an offering was coming. But the stock is also up 98% from Dec. 19, when it closed at $4.99.

Graseck also boosted targets on Citigroup, Goldman Sachs (GS) and JPMorgan Chase.

Seventeen of the 30 Dow stocks were higher. The laggards were Bank of America and Microsoft (MSFT), which was down 40 cents to $32.20. (Microsoft is the publisher of MSN Money.)

Meanwhile, 280 S&P 500 stocks were higher, with U.S. Steel (X) the top percentage performer, up $1.89 to $31.64. The steel producer should benefit from a recovery in steel prices, UBS in a note. Next was Netflix (NFLX), up $4.37 to $114.33.

United Parcel Service (UPS) rose $2.70 to $81.11. It hit $81.55, its highest intraday price since 2006. The company agreed to buy TNT Express for 5.16 billion euros ($6.8 billion).

The S&P 500 laggards were Sprint Nextel (S) and Kohl's (KSS), down $1.65 to $48.72.

Sixty-seven Nasdaq-100 stocks were higher. The biggest percentage gainers were Netflix and handbag maker Fossil (FOSL), up $4.47 to $130.09. The laggards were Sears Holdings (SHLD), down $2.69 to $79.86, and Vertex Pharmaceuticals (VRTX), down $1.30 to $41.64.

Sprint could be face a bankruptcy filing
Sprint declined 17 cents to $2.72. The third-largest U.S. wireless carrier was downgraded by Sanford C. Bernstein's Craig Moffett amid concern the company won’t sell enough iPhones to afford its "punishing" commitment with Apple.

A bankruptcy filing is a legitimate concern, he wrote in a note to clients, if the company can't complete its network upgrade and delivers "a compelling 4G product."

"The problem is 4G," Moffett wrote. "Sprint doesn’t have enough free-and-clear spectrum on which to launch a competitive LTE network, and it doesn’t have the money to clear spectrum that’s already in use. We expect Sprint’s competitiveness to begin to backslide when LTE becomes the nation’s de facto standard."

LTE stands for long-term evolution and is the technology that will power most mobile devices in the next few years.

Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0800%  0.080%

0.00%  700.00%
5-year Treasury note 

1.191%  1.116%

36.11%  43.49%
10-year Treasury note

2.379%  2.298%

20.33%  27.15%
30-year Treasury bond

3.481%  3.411%

12.80%  20.49%
Currencies











U.S. Dollar Index

79.712  80.082  1.17%  -1.01%
British pound

1.5896  1.5858  -0.24%  2.30%
(in U.S. $)

          
U.S. $ in pounds

£0.629  £0.631  0.24%  -2.25%
Euro in dollars

$1.32  $1.32  -0.74%  2.20%
(in U.S. $)

          
U.S. $ in euros

€ 0.755  € 0.758  0.75%  -2.15%
U.S. $ in yen 

83.54  83.38  2.67%   8.35%
U.S. $ in Chinese

6.35  6.32  0.43%  0.31%
yuan

            
Canada dollar

$1.013  $0.991  0.11%  3.29%
(in U.S. $)

          
U.S. dollar 

$0.988  $0.991  -0.12%  -3.19%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,667.30

$1,655.80

-2.57%

6.41%
(per troy ounce)











Copper (-HG)

$3.909

$3.878

0.76%

13.77%
(per pound)











Silver (-SI)

$32.9550

$32.6040

-4.87%

18.05%
(per troy ounce)











Wheat (-ZW)

$6.5225

$6.7200

-2.36%

-0.08%
(per bushel)











Corn (-ZC)

$6.6350

$6.730

0.84%

2.63%
(per bushel)











Cotton 

$0.8990

0.8805

-0.60%

-1.94%
(per pound)











Coffee

$1.8350

1.8235

-9.72%

-20.10%
(per pound)











Crude oil (-CL)

$108.04

$107.06

0.91%

9.32%
(per barrel)










 

28Comments
Mar 19, 2012 2:36PM
avatar

Volume has been light for weeks because the retail investor has had enough of the Wall Street ponzi scheme.  My 401 just got back to where it was in 2009 and I have reallocated out of this madness for a time.

 

MSOBAMANBC and other media keeps singing "Happy Days are Here Again" while mainstreet struggles to keep gas in the car and surviving on the $ 7.25 hr. the 220,000 new jobs created are paying.  The media hypes Iran as the reason for high gas prices while JP Morgan, Goldman Suchs, B of A and othe large  banks take that zero interest money from the Fed and run straight to the trading desk and speculate commodities.  The Banks and Wall Street were behind this in 2007-2008 and created along with the housing bubble the economic collapse.

Mar 19, 2012 5:06PM
avatar
It was just written today by some experts that the middle american family is just about at the tipping point with oil and gasoline.  If gas gets to $5.00 a gallon, watch what happens to the American economy.  Just say thanks to the speculators, government regulators, big oil and the big banks for what is about to happen.
Mar 19, 2012 3:07PM
avatar

Well the oil is going up and gas is already out of sight, the banks are in on it and wall streeters are doing the speculating and hedgefunds and making a killing. All this adds up to 2008 and you lose your donkeys and chickens overnight. Great buch of greedy idiots that really care for the American poor people. Yeah right they only care about their pocketbooks, but it will come back to them soon.

If oil would stay low then the market would thrive, but it will go higher and the market will blow out and we'll all lose as we did in 2008!

Mar 19, 2012 5:15PM
avatar
Many people in my area including myself have already cut back on spending. Keep on pushing the Greed Wall Street and it is all going to blow up in your face. If you think that your big market is going to continue to prosper while at the same time you are crushing the American Consumer beneath your feet, think again. It is just a matter of time and spending will tank and than your market bubble will burst and your walls will come falling down around you. You have no clue what the average American family is going through to keep things afloat, but you will before it is over. I have never seen a more Greedy bunch in my life as you. Your day is coming.
Mar 19, 2012 1:47PM
avatar
Volume is once again VERY light...And although most bull markets are capable of "climbing a wall of worry" the overbought condition gives US cause for concern...
Mar 19, 2012 3:19PM
avatar
Well all of you have a good day and I will see you in the funny papers while the speculators and wall street and the big oil companies are laughing at us.
Mar 19, 2012 5:49PM
avatar

CGT1

 

Where do you come up with such nonsense? Do you know the difference between trading and manipulating ? What do you suppose is the purpose of a stock exchange ? If the market can be so easily manipulated as you suggest, then why are so many traders going to the slammer for insider trading if they didn't need that leverage ? It's pretty obvious that you are a financial neophyte trying to make an impression. I am not saying that manipulation does not exist but don't confuse normal market vacillations with abnormal manipulations. There is no question that the commodity market, particularly oil is manipulated but that is not tantamount to the swings in apple.

Mar 19, 2012 2:58PM
avatar
We are heading to the final hour and trying to hang in there...Wont be as simple as it may seem...Plenty of manipulators and with the volume as low as it is it may be a very volatile last hour....Scumbags will start doing their thing at anytime now....Oh well, more after the close.
Mar 19, 2012 4:52PM
avatar
We were able to stay in the green, barely....Apple really propelled the Nasdaq....Like we said earlier, nothing is taken for granted down here when you have manipulators trying to take control and the volume being so low...We will see what happens tomorrow.
Mar 19, 2012 3:36PM
avatar

Charley....I just don't understand, why a few of these posters just aggravate themselves so much?

 

They should go on USETOOB and try to amuse themselves.

The nine year old would probably like that too.??

 

I know you can't say anything, so I just said it for you.

Mar 19, 2012 8:40PM
avatar
What did I hear this right.  An MSN reporter recieving go money from a labor union.  Oh no say it ain't be so Charlie.  Marie gets a lot more than a measly 200 grand.  I almost started believing you folks were sorta straight.
Mar 19, 2012 5:19PM
avatar
There's some people on here, that even have their own posse'
Mar 19, 2012 7:13PM
avatar

George W. Bush just got through endorsing Rick Perry for President.

 

Par for the course!

Mar 19, 2012 6:29PM
avatar
Keep on pushing the Greed Wall Street

brent,

 

I think they know what they are doing.  They are looking for a political outcome.  If they can make a few bucks along the way, so much the better for them.  Middle class folk?  Well, the traders got a big middle finger for them.

Mar 19, 2012 3:57PM
avatar

Love it......They announce a 1.8% dividend and it runs North 2.3 %...

 

Some are going to make money, some are not.

Mar 19, 2012 3:50PM
avatar

I was the 12th poster, so I won the drawing for the day................

 

"On the Twelfth day of Christmas my true love,sent to me............" 

Mar 20, 2012 10:20AM
avatar

Nobody in shock down here today, 15 minutes or more yesterday and we would have ended down big...Manipulators in complete control, apparently the flavor of the week may be China....Oh well, still early, although to be honest things are looking bleak....More later, lets see how things develop.

Mar 19, 2012 3:00PM
avatar
While Manning negotiates to take Tebow's job with Elway in Denver, Tim Tebow is raising funds for wounded veterans

They're both overpaid gladiators for the Sunday beer drinking fanatics and fools.

Mar 19, 2012 8:27PM
avatar
All it takes is a couple of good analysts and your stock will look good even if you have stepped in a pile of crap! I guess you can tell I don't like apple!  First off, they are too cheap to manufacture in the U.S.A.  Second their products are way too expensive.  Third they never develop upgrades to their original products because they have suckers that will always be waiting in line or pre-ordering their product every time they make something!!  Trust me, I would not shed one tear if Apple was no longer around!
Mar 19, 2012 8:16PM
avatar
Creepy Wall Street people, with their tiny little eyes, screaming...."invest​, invest!" you say. I'm stuffing my pillow cases with benjamins. Forget 'choo...
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