Dell Dumped, HPQ Hoisted — Wednesday’s IP Market Recap

by Marc Bastow | May 23, 2012 5:31 pm

[1]The tsunami of selling that Dell (NASDAQ:DELL[2]) unleashed after last night’s earnings[3] washed over the entire tech sector until a modest afternoon rally helped stem the tide, and markets rallied enough to produce mixed results by the end of the day.

Dell shares gave up 17% Wednesday and continued to fall fractionally in after-hours trading.

Climbing out from the day’s muck was Facebook (NASDAQ:FB[4]), whose shares rose 3.2% on the day to finish at $32 despite a slew of news concerning its recent IPO, including a lawsuit filed by three Facebook investors[5] who say that analysts at the underwriters’ banks — including lead underwriter Morgan Stanley (NYSE:MS[6]) — did not properly disclose any changes to forecast earnings or revenues.

For the day, the Dow gave up 0.05% to close at 12,496, the S&P eked out a gain of 0.17% to 1,319, and the tech-heavy Nasdaq recovered from early losses to finish up 0.39% at 2,850.

Dell’s disappointing earnings and forecast cast a pall over the industry early, taking down Dow stocks Microsoft (NASDAQ:MSFT[7]) and Intel (NASDAQ:INTC[8]) by 2% on the day. Apple (NASDAQ:AAPL[9]) managed to buck the tech trend, rising 2.4% on the day.

Hewlett-Packard (NYSE:HPQ[10]) was down more than 3% during the day as investors braced for its afternoon earnings release. HPQ released better-than-anticipated results, with earnings of 98 cents per share beating Wall Street expectations of 91 cents, while sales came in at $30.7 billion, ahead of the $29.9 billion consensus.

HPQ also announced that as part of a restructuring plan, it expects approximately 27,000 (8% of total) employees to leave by the end of fiscal year 2014. The news sent HPQ shares soaring more than 10% after the bell.

Bank stocks rallied on stronger-than-expected news[11] on housing. Bank of America (NYSE:BAC[12]) rose 2% Wednesday, and JPMorgan (NYSE:JPM[13]) and Citigroup  (NYSE:C[14]) each gained about 1%.

On the earnings front, Toll Brothers (NYSE:TOL[15]), Papa John’s (NASDAQ:PZZA[16]), and Cheesecake Factory (NASDAQ:CAKE[17]) were all down early in the day[18] on disappointing earnings news. However, Toll rallied behind the housing news to finish ahead 2.6%, while Papa John’s and Cheesecake Factory also found their footing as the day went on, with both finishing up over 2%.

Earnings releases scheduled for Thursday include Costco (NASDAQ:COST[19]), H.J. Heinz (NYSE:HNZ[20]), and Tiffany & Co. (NYSE:TIF[21]).

Three Up

• PetSmart (NASDAQ:PETM[22]): Up 13.16% ($7.32) to $62.94.
• Compuware (NASDAQ:CPWR[23]): Up 9.47% (80 cents) to $9.25.
• Expedia (NASDAQ:EXPE[24]): Up 6.79% ($2.90) to $45.61.

Three Down

• Nokia (NYSE:NOK[25]): Down 4.86% (14 cents) to $2.74.
• Juniper Networks (NYSE:JNPR[26]): Down 4.17% (75 cents) to $17.24.
• Red Hat (NYSE:RHT[27]): Down 3.36% ($1.89) to $54.43.

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long MSFT, AAPL and INTC.

Source URL: https://investorplace.com/2012/05/wednesdays-ip-market-recap-dell-fb-ms-msft-intc-hpq-aapl/

---