Apple Bombs, Sectors Revolt — Tuesday’s IP Market Recap

by Kyle Woodley | October 18, 2011 5:00 pm

Tuesday proved to be an “opposite day” of sorts on Wall Street, with several sector giants reporting, and their respective businessmates turning in the opposite direction of the news. Cases in point: Goldman Sachs (NYSE:GS[1])/Bank of America (NYSE:BAC[2]) and IBM (NYSE:IBM[3]). But the big news of the day didn’t come until after the bell, when Apple (NASDAQ:AAPL[4]) released the report everyone was waiting on.

And it flopped. Apple threw up a rare earnings miss Tuesday, reporting earnings per share of $7.05 compared to analyst estimates for $7.39. In its first report announced with CEO Tim Cook at the helm, Apple said it sold just more than 17 million iPhones, which was 3 million short of expectations. The news sent AAPL stock down 5% in after-hours trading to below the $400 mark[5].

Earlier Tuesday, the financial sector threw itself a ticker-tape parade to the tune of a 6% gain in the KBW Bank Index (BKS) that tracks 24 of the largest publicly traded financial companies. This came despite Goldman Sachs’ third-quarter earnings report, which had GS posting only its second quarterly loss[6] in the company’s 13-year history as a publicly traded stock and a wide earnings miss.

And it also came despite Bank of America’s third-quarter earnings report, which did reveal earnings of 56 cents per share vs. EPS estimates of 20 cents and a 6% climb in revenue, but still showed massive weaknesses in BofA[7] to anyone willing to look a little closer.

No, it’s apparently still good times for anyone dealing dollars. Goldman Sachs finished up 5.52% at $102.25, and BAC stock finished up more than 10% at $6.64 — almost the highest it has traded since Sept. 29, when BofA announced it was charging $5-per-month debit-card fees[8]. And riding the gravy train higher were banking acquaintances JPMorgan Chase (NYSE:JPM[9], +6.77%, $33.14), Citigroup (NYSE:C[10], +5.9%, $25.86) and Deutsche Bank (NYSE:DB[11], +5.25%, $37.91), among others.

Not faring as well on its own bad news was IBM. While IBM reached an all-time peak in stock value last week[12] and on Tuesday morning reported a 7% increase in earnings for the third quarter, those earnings ($3.19 per share) just fell shy of expectations ($3.22), and out the bottom went — to the tune of a 4% loss, taking IBM to $178.90 by the end of the day.

Tech stocks, however, didn’t follow suit, with the Dow Jones U.S. Technology Index (DJUSTC) up more than 1% and the Nasdaq-100 Technology Sector (NDXT) index up about 1.7%. Tech companies making gains included Hewlett-Packard (NYSE:HPQ[13], +3.02%, $25.61), Dell (NASDAQ:DELL[14], +2.5%, $16.37) and Google (NASDAQ:GOOG[15], +1.39%, $590.51).

Three Up

Three Down

As of this writing, Kyle Woodley did not own a position in any of the aforementioned stocks. Check out recaps from previous trading days here[22].

Endnotes:
  1. GS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GS
  2. BAC: http://studio-5.financialcontent.com/investplace/quote?Symbol=BAC
  3. IBM: http://studio-5.financialcontent.com/investplace/quote?Symbol=IBM
  4. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  5. to below the $400 mark: http://investorplace.com/2011/10/apple-shares-tumble-after-rare-profit-disappointment/
  6. second quarterly loss: http://abcnews.go.com/Business/goldman-sachs-reports-2nd-loss-history/story?id=14722449
  7. showed massive weaknesses in BofA: http://investorplace.com/2011/10/bank-of-america-earnings-nyse-bac-financial-stocks/
  8. charging $5-per-month debit-card fees: http://investorplace.com/2011/10/bank-of-america-debit-card-bac/
  9. JPM: http://studio-5.financialcontent.com/investplace/quote?Symbol=JPM
  10. C: http://studio-5.financialcontent.com/investplace/quote?Symbol=C
  11. DB: http://studio-5.financialcontent.com/investplace/quote?Symbol=DB
  12. all-time peak in stock value last week: http://investorplace.com/2011/10/ibm-call-options-a-buy-in-front-of-monday-earnings/
  13. HPQ: http://studio-5.financialcontent.com/investplace/quote?Symbol=HPQ
  14. DELL: http://studio-5.financialcontent.com/investplace/quote?Symbol=DELL
  15. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  16. TOL: http://studio-5.financialcontent.com/investplace/quote?Symbol=TOL
  17. VMW: http://studio-5.financialcontent.com/investplace/quote?Symbol=VMW
  18. HST: http://studio-5.financialcontent.com/investplace/quote?Symbol=HST
  19. CROX: http://studio-5.financialcontent.com/investplace/quote?Symbol=CROX
  20. HSP: http://studio-5.financialcontent.com/investplace/quote?Symbol=HSP
  21. JAZZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=JAZZ
  22. here: http://investorplace.com/hot-topics/investorplace-market-recap/

Source URL: http://investorplace.com/2011/10/goldman-sachs-bank-of-america-ibm-earnings-market-summary/
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