Date: Tuesday 20 Jul 2010
Wall Street rallied near the close with after-hours trading also lifted by much better than forecast numbers from Apple as iPad sales boomed.The Dow closed 75 points higher at 10,229. Nasdaq added 24 at 2,222 while the S&P 500 gained 12 at 1,083.
Shares in Apple rose by more than 3% after-hours as third quarter sales rose 61% to $15.7bn, while net income rose 78% to $3.25bn. It was its best quarter ever.
Since its launch in April, Apple has sold 3.27m iPads, but even this was outstripped by sales of Macs, which hit 3.47m units, the best quarter ever for Apple’s stalwart. The company sold 8.4m iPhones, which included seven days of the troubled iPhone 4.
For the current three months, Apple predicted earnings of about $3.44 per share in the current quarter on revenue of around $18 bn.
Elsewhere, BP is to sell $7bn worth of oil and gas assets in Texas and New Mexico to oil firm Apache. "We have achieved an excellent price for a set of properties that are worth more to others than to BP," BP chief executive Tony Hayward said in a statement.
Earlier, earnings from Goldman Sachs missed expectations and dragged down other financial stocks. Profit slumped 82% at the Wall Street giant in the second quarter as the bank took a hit from Britain’s bank bonus tax and a fraud settlement with the Securities and Exchange Commission.
Net earnings fell to $613m, or 78 cents a share, in the three months to 30 June from $3.44bn, or $4.93 a share, the year before. That disappointed the markets who were looking for earnings of $1.28bn, or $2.08 a share.
Computer services firm IBM missed estimates when it published quarterly figures after the bell last night. The disappointment was due to low demand for services. IBM reported a 9% rise in net income to $3.4bn, though revenues rose only 2% versus a year ago to $23.7bn. Analysts were looking for stronger revenues.
Meanwhile, chipmaker Texas Instruments’ sales and profits also failed to meet expectations after the bell on Monday.
Johnson & Johnson's revenue fell short of Wall Street estimates. Global sales of consumer products dropped 5.4% in the second quarter to $3.6bn, while the group cut its full-year profit forecast. Johnson & Johnson said full year earnings per share are likely to fall somewhere between $4.65 and $4.75 inclusive, a step down from its previous guidance in April of $4.80 - $4.90.
Across the markets, the Dow dived 92 points to 10,062, with the Nasdaq 22 points lower at 2,176. The S&P 500 is currently 7 points down at 1,064.
On the positive side, Harley-Davidson jumped after second-quarter adjusted earnings of 59c comfortably beat expectations of 42c.
Computer chip supplier Intel has reportedly cut a deal with the US Federal Trade Commission, bringing to an end the FTC’s investigation into Intel’s business practices. The commission had alleged that Intel exploited its dominant market position over a ten year period.
Intel has previously settled a civil suit brought against it by AMD, paying its rival $1.25bn, and has also paid out €1bn in fines as a result of investigations by the European Commission.
Economic news was disappointing. Housing starts fell 5% in June to a seasonally adjusted annual rate of 549,000 in June, according to figures from the Commerce Department. That decline was more than expected.Payrolls decreased in 27 of the 50 US states in June. Employers in California cut staff by 27,600 workers last month and those in New York reduced employment by 22,500, figures from the Labor Department in Washington show.
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