by Marc Bastow | May 23, 2012 5:31 pm
The tsunami of selling that Dell (NASDAQ:DELL) unleashed after last night’s earnings 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), 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 who say that analysts at the underwriters’ banks — including lead underwriter Morgan Stanley (NYSE:MS) — 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) and Intel (NASDAQ:INTC) by 2% on the day. Apple (NASDAQ:AAPL) managed to buck the tech trend, rising 2.4% on the day.
Hewlett-Packard (NYSE:HPQ) 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 on housing. Bank of America (NYSE:BAC) rose 2% Wednesday, and JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) each gained about 1%.
On the earnings front, Toll Brothers (NYSE:TOL), Papa John’s (NASDAQ:PZZA), and Cheesecake Factory (NASDAQ:CAKE) were all down early in the day 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), H.J. Heinz (NYSE:HNZ), and Tiffany & Co. (NYSE:TIF).
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long MSFT, AAPL and INTC.
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