Nasdaq Surges On Strong Apple Earnings
We started the week with signs of cautious optimism in the stock market and that confidence amongst investors appears to have gained momentum on Tuesday, as the leading stock index benchmarks have pushed on from yesterday’s advance to attain even bigger gains.
By Peter Martin
Wednesday, October 22, 2014 - 00:00
A part of that confidence will have come from bumper earnings from iPhone maker Apple ($AAPL), which smashed expectations with its quarterly earnings , reported after the market last night. Apple’s fourth-quarter earnings grew 14% from the year-ago comparison, climbing to $1.42 per share versus analyst expectations of $1.31 per share. iPhone sales were up 21% from a year ago at 39.3 million units, accounting for more than half of the company’s $42.1 billion in revenue. The company’s revenue guidance is an encouraging $63.5 billion to $66.5 billion for the subsequent quarter.
‘Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus,’ said CEO Tim Cook. Shares in Apple rose 2.36% to $102.10 by mid-afternoon in New York.
A number of Dow components have reported today, with a mixed bag of outcomes. Telecommunications company Verizon advanced 1.1% despite missing analyst expectations slightly with its earnings, though the company reported healthy demand for broadband and wireless servces; Coca-Cola fell 6.2% after meeting estimates with adjusted earnings, but coming up short on revenue; McDonald’s declined 0.71% following disappointing earnings and revenue; Travelers climbed 1.07% after beating on both fronts; and United Technologies rose 0.75% with a profits beat.
Stock prices were generally well up on Wall Street, led by the energy sector. The Dow Jones Industrial Average gained 1.12% or 183 points to 16,582, lagging behind the S&P 500 index, which surged 1.68% to 1936.0. The strongest performance came from the NASDAQ 100, jumping more than 2% to 3956.4.
Stock market gains were bolstered by encouraging data for the housing market, the only significant macro release of the day on the domestic front. Existing home sales grew 2.4% in September, climbing to an annualized pace of 5.17 million from the 5.05 million seen in August. Expectations had pointed to 5.10 million. The housing market hasn’t shown too many promising signs in recent months, but with mortgage rates improving and the gains seen in the labor market, this report may stoke some optimism for a resurgence in this sector of the economy.
Speculation that weakness in global growth may force the Fed to maintain accommodative policy, and possibly even stimulus, longer than previously thought has started to boost the price of gold. Spot gold has consolidated yesterday’s gains, climbing 0.25% to $1250.1 per troy ounce today, touching its highest level in five weeks earlier in the trading session.
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