Tech Earnings Come In Strong
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Aside from a few exceptions like Nokia, AMD and Texas Instruments, first-quarter technology earnings have so far been surprisingly strong.
Apple, Amazon.com, EMC, VMware, Yahoo and Broadcom were the latest tech bellwethers reporting better than expected results on Tuesday and Wednesday, and while investor reaction to the reports has been mixed, so far the trend is pretty encouraging, given the sharp slowdown in the broader economy.
Perhaps technology's reputation for boosting efficiency along with more restrained IT spending during the economic expansion is encouraging continued spending in the sector.
Investors still have one more big report to get through this month Microsoft on Thursday night and then the cycle will begin again next month with reports from Cisco, HP and Dell.
Apple and Amazon both fell after hours Wednesday, as investors found reason to sell shares of the two companies despite better than expected top- and bottom-line growth. Amazon fell 4% on renewed margin concerns despite earnings of 34 cents a share and sales of $4.13 billion, both ahead of estimates.
Apple slipped as investors fretted about lukewarm guidance and iPhone sales that were merely in line with estimates. Strong Mac and iPod sales made Apple's quarter, with earnings of $1.16 a share and $7.5 billion in revenues. The company also said it expects to hit its goal of 10 million iPhones sold this year.
Stocks rose during the day, as better than expected technology earnings overcame weak results from bond insurer Ambac.
Broadcom, VMware, Level 3 and Skyworks were big winners on their results.
The Nasdaq rose 28 to 2405, the S&P climbed 4 to 1379, and the Dow rose 43 to 12,763. Volume rose to 4.1 billion shares on the NYSE, and 2.18 billion on the Nasdaq. Advancers led by a 17-15 margin on the NYSE, while decliners led by a 19-10 margin on the Nasdaq. Upside volume was 45% on the NYSE, and 54% on the Nasdaq. New highs-new lows were 53-113 on the NYSE, and 37-152 on the Nasdaq.