On Tuesday, stocks eked out the second small gain of the new month, led by the industrial sector’s gains that offset a decline in crude oil and the energy sector.
According to FactSet more than two-thirds of the S&P 500’s companies have reported quarterly earnings, and their results are the best since Q3 of 2011.
But despite the better quarterly earnings for most stocks, investors appeared focused primarily on the post-market results of Apple Inc. (NASDAQ:AAPL). Apple, the largest company by capitalization, rose over 27%, year-to-year, so investors’ focus on it is understandable.
However, yesterday other stocks reported increases in earnings: MasterCard Inc (NYSE:MA) posted higher revenues and earnings, and Cummins Inc. (NYSE:CMI) rose over 6% following an announcement of higher guidance for the remainder of the year.
Crude oil (WTI) fell 2.4% to $37.66 per barrel and energy stocks followed with decline of 0.5%.
At the close, the Dow Jones Industrial Average rose 36 points, closing at 20,950, the S&P 500 gained 3 points at 2,391, the Nasdaq gained 4 at 6,095, and the Russell 2000 fell 8 points at 1,399. The NYSE’s primary exchange traded 908 million shares with total volume of 3.8 billion shares, and the Nasdaq crossed 2 billion shares. On the Big Board, advancers and decliners were virtually even, and on the Nasdaq, decliners led by 1.3-to-1. Blocks on the NYSE increased to 7,352 from 6,284 on Monday.
With one stock, Apple, having a broad influence on many stocks, I will not view an index or indices today but focus on yesterday’s post-market response. Following yesterday’s close CEO Tim Cook said that the company had a shortfall in iPhone sales. In the March ending quarter, sales were 50.76 million units. That’s a lot of phones but still short of analysts’ expectation of 52 million units. As a result, AAPL fell over $3 in post-market trading. Technically, the first support for Apple is its 20-day moving average (green line at $143), then the 50-day moving average at $141 and the support line at $140.
Conclusion: My guess is that AAPL will stabilize somewhere above $140. However, a broad negative impact on the technology sector may be greater since suppliers are working with very slim profit margins.
Tomorrow I’ll examine the small- and mid-caps charts in more depth, but for now it looks like the iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) will stabilize between $135 and $139, and the SPDR S&P MidCap 400 ETF (NYSEARCA:MDY) has support at $305 to $312.
Today’s Trading Landscape
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
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