Apple blowout quarter stokes Wall Street
Stocks advanced on Wednesday after a blowout quarter from Apple further lifted optimism in an earnings season that has far outstripped expectations.
The Apple report overshadowed a bearish reading on durable goods orders.
Earnings at Apple Inc
Apple stock dominates markets because of its size and has recently sold off, partly on fears earnings could disappoint. The rally helped the Nasdaq climb almost 2 percent and could propel the market back to 2012 highs hit earlier this month.
Apple is the largest company in the world, so it is going to drag the market wherever it goes. The results there were great, but the number of Apple products sold doesn't give any indication into the fundamentals of the economy, said Phil Silverman, managing partner at Kingsview Capital in New York.
The Dow Jones industrial average <.DJI> was up 70.92 points, or 0.55 percent, at 13,072.48. The Standard & Poor's 500 Index <.SPX> was up 13.49 points, or 0.98 percent, at 1,385.46. The Nasdaq Composite Index <.IXIC> was up 56.13 points, or 1.90 percent, at 3,017.73.
The earnings season so far has been stronger than expected. With 200 of the S&P 500 companies reporting, three-fourths have topped estimates, according to Thomson Reuters data.
With Apple's results, analysts' projected 1st-quarter S&P 500 earnings growth rate rose to 6.9 percent from about 4 percent earlier in the week and is well above the 3.2 pct forecast at the start of the earnings period.
Also on the earnings front, two Dow components reported.
Boeing Co
Caterpillar Inc
The S&P 500 has fallen as much as 4.2 percent after jumping about 30 percent from October to a 2012 peak in April. Fears of a resurgent debt crisis in Europe have been a major driver of the pullback.
In a troubling sign, March durable goods orders fell 4.2 percent in the biggest decline in three years. The report was the latest to show softness in economic data.
The durables show that growth is slowing, and that's not something we're seeing reflected in today's market, Silverman said. People are going to need to take another look to see how attractive valuations really are.
The Federal Reserve resumed a 2-day meeting that is expected to yield upward revisions to its growth forecasts but not enough for officials to take off the table the option of a further easing of monetary policy.
(Editing By Jeff Benkoe)
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