Apple shares jump after earnings smash estimates
Apple says iPhone sales jumped 128% in its fiscal first quarter; iPad sales r0se 111%. Tech shares mostly bask in the report. The Dow drops 33 before the report as Europe worries investors again. Gold and oil fall.
Apple (AAPL) shares jumped as much as 11% after hours today as the company reported a 118% gain in net income along with a 73% gain in revenue in its first fiscal quarter.
The results, which included sales of of 37 million iPhones and 15.4 iPads, came after the stock market finished down slightly as traders fretted that the negotiations on restructuring Greek debt were coming apart.
Apple reported earnings of $13.87 a share, or $13.06 billion, on revenue of $46.33 billion for the quarter. Analysts had expected $10.08 a share in earnings and revenue of $38.55 billion. The results came after Apple had missed estimates in its fiscal fourth quarter. At 5:47 p.m. ET, Apple shares were up 7.4% to $451.51. The shares had dropped $7 to $420.41 in regular trading.
Wall Street is hoping the results kick-start a market that's seemed lethargic this week after three straight weeks of gains. Futures trading suggests stocks will open higher on Wednesday.
The Dow Jones industrials ($INDU) finished down 33 points to 12,676. The blue chips had fallen as many as 95 points right after the open. The Standard & Poor's 500 Index ($INX) was off 1 point to 1,315; the index had dropped to as low as 1,306. The Nasdaq Composite Index ($COMPX) was up 2 points to 2,787 after sliding to as low as 2,766. The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was down 3 points to 2,434.
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Apple can heavily influence the market. Its shares represent some 12% of the market capitalization of the Nasdaq-100 index. And component makers for its products include a who's who of tech land, such as Qualcomm (QCOM), Broadcom (BRCM) and others.
Broadcom was up 3.4% after hours to $36.40 after rising 76 cents in regulat trading. Qualcomm had climbed $1.17 after hours to $59.85.
Rivals such as Google (GOOG), whose Android operating system powers many competing devices, and Microsoft (MSFT) were modestly higher after hours. (Microsoft is the publisher of MSN Money.)
Yahoo's results are flat
Investors seemed indifferent to fourth-quarter results from Yahoo (YHOO) after the close. Shares were off 10 cents to $15.59.
Yahoo's net income fell to $296 million from a year ago's $312 million. Earnings per share were unchanged at 24 cents.
Revenue net of payments to partners (known as traffic acquisition costs) was $1.17 billion. That's down from $1.21 billion a year ago. Wall Street had expected 24 cents a share in earnings and revenue of $1.19 billion.
The company said it expects revenue net of traffic acquisition costs of $1.03 billion to $1.11 billion in the first quarter. Shares gained a penny in regular trading to $15.69, and gained another penny after hours.
Europe re-emerges as a problem
European finance ministers pushed bondholders to provide greater debt relief for Greece. That boosted fears the nation may miss a March 20 bond payment. The latest iteration of the Greek debt crisis weighed on stocks in Europe, especially bank stocks. Many U.S. bank stocks were also lower today.
Europe had been fairly quiet this month. Not so today with the Greek problem erupting again.
The European uncertainty also weighed on nonfinancial stocks. McDonald's (MCD) beat Street estimates for fourth-quarter results, but the company warned that currency fluctuations could trim 2012 profits by 16 to 18 cents a share. Shares fell $2.20 to $98.75, the second-worst performer among the 30 Dow stocks.
Adding to the day's stress, the International Monetary Fund trimmed its global growth estimates for the year to 3.3%, but warned the eurozone debt crisis could knock an additional two percentage points off worldwide output if eurozone leaders don't act soon.
The IMF said inaction could push the teetering eurozone headlong into a severe recession where growth contracts by 4% over the next two years.
This evening, President Barack Obama will lay out what he calls a "blueprint" for revitalizing the economy in his third State of the Union address before a joint session of Congress.
Separately, the Federal Reserve began a two-day policy meeting. Its decisions will be announced at 12:30 p.m. ET Wednesday. Chairman Ben Bernanke will hold a new conference at 2:15 p.m. ET.
The announcement will also include the Fed's first explicit projections of interest rates, inflation and possibly a target for the unemployment rate.
|Energy prices -- New York close|
|Tues.||Mon.||Month chg.||YTD chg.|
|Crude oil (-CL)||$98.95||$99.58||0.12%||0.12%|
|Heating oil (-HO)||$3.0151||$3.0035||3.46%||3.46%|
|Natural gas (-NG)||$2.5540||$2.5250||-14.55%||-14.55%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.8105||$2.7856||5.76%||5.76%|
|(per gallon; AAA)|
Oil, gold and silver drop; dollar moves higher
The dollar was higher today as the uncertainty in Europe took center stage yet again.
That pushed oil prices, gold and silver lower.
Crude oil (-CL) in New York settled down 63 cents to $98.95 a barrel. Brent crude was off 38 cents to $110.20 a barrel.
Despite the dollar's gains, the 10-year Treasury yield was at 2.064%, down from 2.067% on Monday.
A big game of chicken on Greece
Late Monday, eurozone finance ministers rebuffed a deal presented by private owners of Greek debt as a "maximum" offer for the losses they are willing to sustain. The rebuff opened a fresh round of brinkmanship in tortuous negotiations to ease the country’s debt load.
A deal between the Greek government and the banks that hold Greek national bonds is considered to be the key to the stability of the European financial system. Investors fear that if Greece can't pay its debt, it could trigger a panic.
Greece is trying to get its private creditors to swap their Greek government bonds for new ones with half their face value. But the interest rate has been a stumbling block. Greece faces that important bond repayment deadline in March.
At the same time, the Greek government is under tremendous pressure to find a way to get its economy growing again.
Leaders and laggards
Polycom (PLCM) surged $2.43 to $20.85. The largest independent maker of videoconference systems reported fourth-quarter earnings excluding some items of 41 cents a share, exceeding the 29-cent average estimate by analysts.
Western Digital (WDC) gained $2.17 to $36.88, fifth-best among S&P 500 stocks. The maker of disk drives and networking products reported second-quarter revenue of $2 billion, surpassing the average analyst estimate of $1.84 billion.
Collective Brands (PSS) rose 95 cents to $15.89. The maker of Saucony and Sperry Top-Sider shoes -- which said in August it was reviewing options to boost shareholder value -- may attract interest from buyout firms and rivals such as Wolverine World Wide when bids are due next week, Bloomberg News said. The company could be worth as much as $27 a share based on the value of its separate businesses, Morningstar said.
EMC (EMC) gained $1.70 to $25.14. The world's biggest maker of storage computers reported a 32% gain in fourth-quarter earnings, helped by demand for its products and software from majority-owned VMware (VMW).
VMware, the biggest maker of software that lets computers run multiple operating systems, jumped $6.66 to $92.66. The company reported sales and profit that topped estimates as corporations bought more programs to make servers more efficient.
Travelers Companies (TRV) slipped $2.29 to $58. It was the worst performer among the 30 Dow stocks. The only insurer among Dow stocks said fourth-quarter profit fell 31% on lower investment income and a smaller benefit from reserves.
Verizon Communications (VZ) shares were lower after its results missed estimates. Its decline of 61 cents to $37.79 was the third-biggest percentage loss in the Dow. The second-largest U.S. phone company reported a fourth-quarter loss after booking a pension charge and having higher subsidy costs for rising iPhone sales.
Peabody Energy (BTU) dropped 65 cents to $36.86. The biggest U.S. coal producer posted fourth-quarter profit that missed analysts' estimates and said output will be curbed at the Twentymile mine in Colorado.
Zions Bancorporation (ZION) had the biggest loss in the S&P 500, falling $1.40 to $17.15. The Salt Lake City-based bank was cut to "hold" from "buy" at Stifel Nicolaus & Co. after reporting fourth-quarter earnings that missed the average analyst estimate.
|Short hits from the markets -- New York close|
|Tues.||Mon.||Month chg.||YTD chg.|
|13-week Treasury bill||0.0400%||0.040%||300.00%||300.00%|
|5-year Treasury note||0.901%||0.911%||8.55%||8.55%|
|10-year Treasury note||2.064%||2.067%||10.32%||10.32%|
|30-year Treasury bond||3.157%||3.146%||9.28%||9.28%|
|U.S. Dollar Index||80.026||79.934||-0.62%||-0.62%|
|(in U.S. $)|
|U.S. $ in pounds||£0.640||£0.642||-0.51%||-0.51%|
|Euro in dollars||$1.30||$1.30||0.56%||0.56%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.768||€ 0.768||-0.56%||-0.56%|
|U.S. $ in yen||77.88||76.98||1.01%||1.01%|
|U.S. $ in Chinese||6.33||6.32||0.12%||0.12%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$98.95||$99.58||0.12%||0.12%|
The Federal Reserve is doing QE3 without telling anyone...
Folks this is scary...this time QE3 is all hush hush...the ONLY reason for ANY sort of 'rally' taking place in the market...lets review:
2008 - 1.4 Trillion printed (did not help much if at all)
2010 - 600 Billion more printed (did not help much if at all)
2012 - 488 Billion more printed (is not helping much at all)
just continuing down a path of MORE DEBT, MORE DEBT, MORE DEBT!!!
the ONLY reason for Wall St pump up...banks getting more funny money!
WAKE UP PEOPLE!!
Does anyone really believe that the Greek private bond holders will swap their current bonds for a 50% cut in face value with the promise that they will get a higher yield later...???
I am sure the bond is covered with Credit default Swaps but higher interest rates...Really...????
There is a lot of negative economic news and yet the market is only down about 40 points?? Seems like it is being "propped up" to me. Europe is still a long, long way from any resolution to their debt crisis but then again so are we but apparently this has no ill effect on the market but time will tell....
"The World Sorta Ended Today, But It Was A Pretty Lame End"
Better luck tomorrow, D&G'rs.
The US Fed pumps in cash
If the world's central banks can't pull off a global rescue this time, it won't be because they haven't tried. They've thrown a lot of money -- and I mean a lot of money -- at the global economy.
For the week ended Jan. 18, 2012, the Fed's balance sheet stood at $2.96 trillion. That's up $488 billion from the week ended Jan. 19, 2011. The increase is substantially due to the Fed's purchase of $576 billion in Treasurys. (The Fed bought Treasurys while selling mortgage-backed securities, resulting in the $488 billion net increase.) That's $488 billion in cash created by the Fed and pumped into the $14.7 trillion U.S. economy in the last year.
In my book, $488 billion is a lot of money. But it is less than the Fed's $600 billion in purchases of Treasurys as a result of the second program of quantitative easing, announced in November 2010, or the $1.4 trillion in purchases of mortgage-backed securities and Treasurys in the first quantitative easing, which began in 2008.
It would appear that considering the amount of physical Gold required to keep up with the payments, a shortfall would occur should Iran call in the 'notes' if this goes long-term. Considering the US's stake in India with off-shore labor and manufacturing, Iran may be getting their fingers into the US's pockets (and corporations) indirectly but very effectively - sly dogs.
tap01, people like Blaine talk about Greece everytime the Dow takes a downturn, because some don't want the people in this country to know that everything in our own domsestic economy isn't quite so peachy. It would effect people's confidence in this so-called recovery, and not serve their interests by pointing out what isn't quite so great at home.
What's ironic however, is just looking at the size of Greek sovergn debt, and comparing it to US debt, from sovergn, to consumer, and otherwise; we're not exactly the people to be preaching fiscal responsibility. The US debt outlook, hasn't exactly been that stellar. I guess it's a see no evil, hear no evil, and keep everyone looking elsewhere (aka Greece).
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[BRIEFING.COM] The major averages punctuated a solid week with a subdued Friday session. The S&P 500 shed 0.2% to narrow its weekly gain to 1.7%, while the Nasdaq Composite (+0.1%) displayed relative strength. The tech-heavy index finished the week in line with the benchmark average.
Market participants went into today's session expecting to hear some new insight from Fed Chair Janet Yellen, who delivered the keynote address at this year's Jackson Hole Symposium. Unfortunately, the ... More
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