Yesterday, a combination of high-flying Apple (NASDAQ:AAPL) — following Q2 earnings that beat expectations — and reassurance that the Fed “is prepared to take additional actions, if necessary,” fueled a broad market rally that ignored all other news. Earlier in the day, durable goods orders were reported to have dropped in March by 4.2% versus an expected decline of 1.7%.
At the close, the Dow Jones Industrial Average gained 89 points at 13,091, the S&P 500 rose 19 points to 1,391, and the Nasdaq was up 68 points at 3,030. The NYSE traded 822 million shares and the Nasdaq crossed 475 million. Advancers led decliners on both exchanges by over 3-to-1.
Apple’s gain, the biggest one-day pop for the stock since late 2008, helped other technology stocks, as well. And the run on techs helped the Nasdaq gain 2.3% for the day.
Apple’s big jump helped the Nasdaq pop above its former resistance at 3,000 to 3,014 and turn that into a support zone. And it also closed above its 50-day moving average at 3,016, which takes the index back to its former range and turns the chart back to short-term down to short-term neutral. Its next resistance is at the 20-day moving average at 3,051 and the April highs at 3,059.
As for the S&P 500, the index closed above both its 20-day and 50-day moving averages and its stochastic flashed a buy signal as well. The Dow also closed above its 20-day and 50-day moving averages accompanied by a positive stochastic.
Apparently not everyone was jumping aboard the “Apple Express.” Curiously the Dow Jones Utility Average had a big move higher as it closed at the top of a bull channel. A move higher by the conservative utility group is usually driven by big money that is more interested in income than growth, and often runs to this index when uncertainty in other sectors is high.
Conclusion: Apple’s huge recovery had an enormous impact on the major indices, but is it possible for one stock to dominate the overall market as to control its basic trend?
There is no doubt that the major indices have been neutralized and that the bull has received an adrenalin shot that has him back on his feet again. But the big question is: Can he thrive on apples alone?
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.
