Wall Street edges up, despite Apple's miss
By Anna Louie Sussman | July 26, 2012 4:35 AM EST
Stocks rose modestly in choppy trading on Wednesday, putting the S&P 500 on track to snap a three-day losing streak, despite a rare earnings disappointment from Apple, the most valuable U.S. company.
Apple Inc results fell short of Wall Street's expectations as the European economy sagged and consumers held off buying the company's flagship iPhone ahead of a new version expected in the fall. Apple's stock lost 3.9 percent to $577.60.
The sour news from the consumer technology giant was offset by reports from Boeing and Caterpillar, which strengthened industrial stocks and helped boost the Dow industrials.
Shares of Caterpillar
Cat rallied sharply in the morning after the company noted an improvement in U.S. home sales, an assertion belied by a weak report on U.S. home sales from the Commerce Department.
"The comments in Caterpillar's earnings report was that they we're seeing a recovery in housing and then to get some news after that it was maybe not, that maybe took some of the CAT inflation away," said Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
Housing stocks ranked among the worst performers after the biggest drop in U.S. single-family home sales in more than a year. The PHLX housing sector index <.HGX> tumbled 2.1 percent, pulled lower by a 2.6 percent drop in D.R. Horton
The S&P 500 is testing support at its 50-day moving average at 1,332.85. The benchmark index broke through that level on Tuesday, but rebounded above it after reports the Fed was likely to provide more stimulus.
Both the Dow and the S&P 500 had received a lift at the start of Wednesday's session from a report in The Wall Street Journal on Tuesday afternoon that Federal Reserve officials are moving closer to taking more steps to aid the flagging economy.
Expectations that the Fed will act, maybe as soon as its rate-setting meeting next week, have been growing. Tuesday's story, while nothing new, helped cement that view.
The Dow Jones industrial average <.DJI> gained 94.49 points, or 0.75 percent, to 12,711.81. The Standard & Poor's 500 Index <.SPX> rose 3.46 points, or 0.26 percent, to 1,341.77. The Nasdaq Composite Index <.IXIC> added 2.34 points, or 0.08 percent, to 2,865.33.
Caterpillar's quarterly profit easily beat Wall Street's expectations, helped in part by growing sales of mining equipment. The world's largest maker of construction machines also raised its 2012 forecast.
Ford Motor Co
Of the 195 companies in the S&P 500 that have reported earnings to date for the second quarter, 64.6 percent have reported earnings above analysts' expectations.
Wall Street had sold off for three straight days on fears that Spain may need a bailout and signs that the global economy is starting to slow down. Despite the pessimism, the S&P 500 is up 6.8 percent this year, and is one of the best-performing broad stock indexes in the world.
(Reporting by Anna Louie Sussman; Editing by Jan Paschal, Dave Zimmerman)
Join the Conversation
- Russia Is Ready for Shooting War, Will Likely Win Looming Nuclear Showdown with U.S. – Report
- Kobani ISIS Fighter Sends Out Desperate Message For Prayers And Support: Euphoria Turns Into Desperation As Kurds Advance
- Home Depot Early Black Friday 2014 Sale Up To Nov. 29, 2014 Includes Special Buys On Appliances Such As Samsung Refrigerators, Whirlpool Electric Ranges And Hoover Vacuum Cleaners
- Microsoft Band Runs Out Of Stock, But Offers $10 Gift Voucher To Wait-Listed Customers
- ISIS War: US Airstrikes Lead to Growing ISIS Support In Syria; Russia Questions Coalition's Policies
- Google Joins Forces with GoPro Inc with New Google Maps Focusing on Destination
- Target Early Black Friday 2014 Sale Ad Released For Nov. 26, 2014 Includes Deals On Toys, HDTVs And Video Games Such As ‘FIFA 15’ And ‘NHL 15’ For Xbox 360 [WATCH VIDEO]