Google, Microsoft, Chipotle results cheer the Street

But IBM shares fall after hours, after earnings miss estimates. Still, stocks may open higher Friday after a Thursday swoon. The major indexes are off more than 2% since peaking last week.

By Charley Blaine Apr 18, 2013 5:58PM
Broken-Pencil © Christian Zachariasen/JupiterimagesUpdated: 4:05 a.m. ET, Friday

If you're looking for good news to give the stock market a boost on Friday, maybe you got it from Chipotle Mexican Grill (CMG), Google (GOOG) and Microsoft (MSFT). (Microsoft owns and publishes MoneyNOW, an MSN Money site.)

Shares of all three were higher after hours on Thursday. Chipotle shares, in fact, were up more than 5% to $346.16 after easily beating Street estimates.

But IBM's (IBM) results were a disappointment. Revenue was down 5.1% from a year ago, and earnings of $3 a share missed Street estimates by 5 cents. Shares were off 3.6% to $199.77.

The reports came after the stock market stumbled to a second loss in a row and its third loss in four days. In addition, Apple (AAPL) closed under $400 for the first time since December 2011. Nonetheless, futures trading early Friday suggested U.S. markets would open with a potentially strong rally.

The Dow Jones industrials ($INDU) closed down 81 points to 14,537. The Standard & Poor's 500 Index ($INX) was off 10 points to 1,542. The Nasdaq Composite Index ($COMPX) was off 38 points to 3,166, while the Nasdaq-100 Index ($NDX) dropped 40 points to 2,742.
Google reported a 15% gain in earnings per share to $11.58, beating the Street estimate of $10.69. Revenue totaled $13.96 billion before payments to advertising partners, up 31% from a year ago - but off slightly from the Street estimate of $14.04 billion.

IBM revenue was $23.41 billion, off $1.28 billion from Street estimates and down 5.1% from a year ago. Earnings were up 7.9% from a year ago, and the company continued to guide to earnings of at least $16.70.

Microsoft shares were 2.3% higher to $29.52., after earnings of 72 cents a share exceeded the Street estimate of 68 cents. Revenue jumped 17.7% from a year ago. But revenue was flat when  pre-sales of its Window 8 operating system is taken out.

Chipotle rallied up $13.59, or 4.1%, to $341.95 after hours . Its first-quarter profit blew past Wall Street’s estimate, and it backed its 2013 forecast for sales at its existing restaurants. Analysts had expected earnings of $2.14. The company reported $2.45. Revenue of $726 million beat Street estimates of $724.8 million.

It appears that the earnings were good enough -- with IBM the outstanding disappointment -- to set Friday's market up for a rally. Futures trading suggested the Dow could open up nearly 80 points,with the S&P 500 up 9 points and the Nasdaq-100 Index up 15 points. 

A gain would relieve many investors. With Thursday's close, the major averages are looking at their worst weekly losses for the year, and the selling has wiped out the market's gains for April.

The Dow, S&P 500 and Nasdaq are off 2.2%, 3.3% and 4.1%, respectively, since hitting a peak on April 11. The market is stumbling because fundamentals are deteriorating, said Alec Young, global equity strategist with S&P Capital IQ, a division of Standard & Poor's.

U.S. economic data has shown the economy is starting to fade, Young said on Thursday. China's economic growth is slowing and Europe is struggling with recession, he added. While the Federal Reserve is pumping money into the economy, Baby Boomers are a big force in the stock market. They're buying stocks -- but stocks that pay high dividends, like healthcare and utility stocks.

If that wasn't enough, technical pressures are hurting stocks, Young said. Materials and energy stocks have slid as commodity prices dropped. Technology shares were weak as well, with Apple a big factor in the softness.

Apple fell $11.18 to $391.62, its first close under $400 since Dec. 22, 2011. The stock is off more than 44% from its intra-day peak of $705.07, reached on Sept. 21, 2012. It's also off 26% this year alone.

The decline is a big deal for the Nasdaq and Nasdaq-100. As of Wednesday, Apple had represented 8% of the Nasdaq's total market capitalization and 15% of the market capitalization of the Nasdaq-100 Index. 

Seven of the 30 Dow stocks were higher, led by Verizon Communications (VZ) and American Express (AXP). UnitedHealth Group (UNH) was the laggard. Health-insurance stocks were generally weaker after United Health offered disappointing guidance for the year.

Only 171 S&P 500 stocks were higher, led by coal producer Peabody Energy (BTU); 16 Nasdaq-100 shares were higher, led by gold-producer Randgold Resources (GOLD).

Crude oil (-CL) in New York and Brent crude in London were higher. So was gold (-GC).

More on Top Stocks
16Comments
Apr 18, 2013 9:53PM
avatar
Oh my goodness.  They just try and "Make" the market drive by such drivel story lines.  MSN is no longer a source for accurate information.  Think they need new direction and better accuracy.  They never tell the real story anymore especially about Obama and all his coverups.
Apr 18, 2013 8:35PM
avatar
Chipotle....PE 37.5. No dividend. As the economy weakens restaurants will weaken too. Sounds like a buy to me.. This one looks a lot like Krispy Kreme did ten years ago. A load of people got burned on that one and they'll get burned on this one too.
Apr 18, 2013 9:53PM
avatar
All is BS ..... it is the same "manipulation" over and over again to make it look like that as is well with this and that.  The "markets" have nothing to do with anything as they are "contrived". Just take a look around and you are seeing a country that is nothing other than broke and getting weaker every day. More survelliance, please.  Watch out in the next couple years! This jerk is in office is hardly intelligent enough to do anything.  He can't and will not.  He is that stupid.  He is a Chicago hood!  
Apr 18, 2013 9:00PM
avatar
What a joke, more BS to try and smooth over the taxpayer, but its a good con just like the drop in gas prices. 
Apr 18, 2013 7:55PM
avatar
Where you got you earning info from? Did you not see the RED? Hahahhaha
Apr 18, 2013 11:16PM
avatar
WATCH OUT. SUCKERS RALLY!!! Wait this thing out for 15% more downside before piling back in. It will be very slow growth ahead if any.
Apr 19, 2013 12:58AM
avatar
Oh yeah, nothing like an increase in sales of crappy wannabee Mexican food sales to drive the market higher
Apr 19, 2013 12:05AM
avatar

No worries. If MSN says it's so, take it to the bank. At least the food bank, maybe?

In the strange new world were in, reality doesn't matter anymore.

Just create your own.

FORWARD.

Apr 19, 2013 7:46AM
avatar

Just another typical MSN bullsh*t article from "Cheerleader Charley".  Every headline he writes has to put a positive spin on negative news.  When the market is down 100 points he describes it as a "slip" or says "slightly down" but if it is up even 10 points he describes the market as "surging", "soaring" etc.  

 

Most intelligent people know that the market has been artificially pumped up by our gov to give the appearance all is well with our economy when in reality it is not regardless of what the politicians and the crooks of Wall St want you to believe.  It would be a breath of fresh air if MSN just told the truth and didn't feel the need to sugar coat every article. 

Apr 19, 2013 6:29AM
avatar

Google- PLEASE buy into my Big Brother scam.

Microsoft- PLEASE buy into my EULA software that always has bugs in it.

Chipolte- you already have an upset stomach from Google and Microsoft, here eat some greasy food.

Apr 19, 2013 6:23AM
avatar
Remember folks... when the market goes up on Kool Aid Tales, that's YOUR life savings Wall Street is risking. They get their fees, you lose. Close the banks, end the Federal Reserve and get RID of Wall Street. There's no legitimate career called- financier. A crook is a crook. Pull out and invest it in where you live, then you can see your money doing the good you know you want it to.
Apr 18, 2013 11:13PM
avatar
The market will open stronger on 3 lukewarm earnings reports then sell off again when everyone realizes that pc sales are off 14% and getting worse which means IBM and everyone in Silicon Valley will be selling off too. All profit is global which means we are in a global recession made worse by overspending on defense and government and relying too much on austerity. Sooner or later, the world governments are going to realize that there are holes that need to be permanently plugged like North Korea and that we can no longer afford to tolerate threatening regimes or function with a fluid southern border that allows anybody who can get across to repeatedly get amnesty. The United States used to be the biggest consumer nation in the world propping up all the exporting nations. Now, with the burden of 72 million illegal aliens we can't afford to buy as much. The Republican Party has killed this country. We bet everything for Big Oil and lost. You will never see cheap oil again. To make things worse, we will have to fight our own Congress to get electric cars and high mileage vehicles imported because these God-fearing right-wingers want us addicted and enslaved to Big Oil. We had electric cars in the early 1900s and think where we would be now if the government hadn't been in bed with the oil companies in suppressing them. We can no longer afford to keep this huge military in place that consistently gets their asses kicked in every war we send them off to. We killed more civilians and friendlies in the last war than actual enemy combatants. What a waste of money. We are still in a Bush recession and it will take many years to recover from 35 years of stupidity.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

112
112 rated 1
270
270 rated 2
444
444 rated 3
693
693 rated 4
637
637 rated 5
692
692 rated 6
615
615 rated 7
498
498 rated 8
265
265 rated 9
126
126 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.