Stocks Rise on Earnings; Apple Wows After Close

Stocks close higher Tuesday thanks to strong earnings and higher energy prices. Apple, Yahoo! beat the Street after the close.

Author:: Melinda Peer
Publish date:: Apr 20, 2010 5:16 PM EDT

NEW YORK (

TheStreet

) -- Stocks closed higher Tuesday thanks to a collage of strong earnings and higher energy prices, just before investors received blowout earnings news from tech titan

Apple

(AAPL) - Get Report

after the closing bell.

The

Dow Jones Industrial Average

finished 25 points, or 0.2% higher, at 11,117. The

S&P 500

gained 10 points, or 0.8%, at 1207 and the

Nasdaq

went ahead by 20 points, or 0.8%, to 2500.

After the closing bell, Apple blew past both top and bottom-line expectations, saying it earned $3.33 a share in the second quarter on $13.5 billion in revenue thanks to improving iPhone sales, among other items. Shares, which declined 1% in the afternoon, were surging 6% in extended trading.

Yahoo!

(YHOO)

also said it earned 22 cents a share in the first quarter, or 15 cents after excluding items, highlighted by a 20% rise in display advertising since the year-ago period, CEO Carol Bartz said in a statement. But net sales fell just short of Street expectations, coming to $1.13 billion. Shares fell over 2% in the afterhours session.

"I think most of the Goldman stuff has now been worked into the market so it comes down to earnings, which have generally been pretty good," said David Chalupnik, head of equities at First American Funds, earlier in the day. He believes markets will drift higher this earnings season, unlike those of the recent past when macroeconomic concerns overshadowed promising results.

"I think investors are getting more comfortable with the sustainability of the economic recovery, which was an issue in the past two earnings seasons. This time around, I think that confidence in the recovery will allow earnings to drive the market forward," Chalupnik said.

Overseas, Hong Kong's Hang Seng gained 1% while Japan's Nikkei slipped 0.07%. The FTSE in London added 1% and the DAX in Frankfurt advanced 1.7%.

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The Economy

The American Petroleum Institute issued its weekly read on crude oil inventories late Tuesday, offering a surprise drawdown. The industry group reported stockpiles fell by 741,000 barrels last week, even though analysts polled by Platts were expecting a build of 300,000 barrels for the week ending April 16.

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Company News

Goldman Sachs

(GS) - Get Report

, which hasn't faded from the market's spotlight since the

Securities and Exchange Commission

accused the firm last week of defrauding investors in the structuring and marketing of one of its financial products, reported first-quarter earnings of $5.59 a share on revenue of $12.78 billion. The results surpassed expectations for a profit of $4.01 and revenue of $11.1 billion.

Analysts pressed the firm for more

details about the fraud case during its conference call to discuss first-quarter results. In other news related to the case,

Goldman's London subsidiary will also be investigated by Britain's financial regulator, the Financial Services Authority. Goldman's stock lost $3.34, or 2.1%, to $159.98.

In other earnings news,

Delta Air Lines

(DAL) - Get Report

met estimates with earnings of 23 cents a share and said its outlook continues to improve as business travel returns. Shares, however, fell off by 2 cents, or 0.2%, to $13.16.

Regional bank

Marshall & Ilsely

(MI)

reported a smaller-than-expected first-quarter loss. Shares finished up 10.7% at $9.31.

Also, fellow regional players

Bank of New York Mellon

(BK) - Get Report

and

U.S. Bancorp

(USB) - Get Report

exceeded and met profit forecasts in their morning earnings statements, respectively. Shares for Bank of New York Mellon added fraction, while U.S. Bancorp shares improved 2.2%.

Shares of

UnitedHealth Group

(UNH) - Get Report

were off by 0.8% after the pharmaceutical company reported a better-than-expected first-quarter profit of $1.03 a share.

Coca-Cola

(KO) - Get Report

reported adjusted first-quarter earnings of 80 cents a share, which beat the profit of 75 cents a share that analysts had been expecting. Sales, however, missed estimates and shares traded down by 85 cents, or 1.5%, to $54.47.

IBM

(IBM) - Get Report

was one of the Dow's biggest laggards despite results that beat expectations late Monday. The tech company also raised its full-year earnings per share guidance to at least $11.20, from $11, previously. But its stock shed 2.54, or 1.9%, to $129.69.

IBM, Coca-Cola and

Kraft Foods

(KFT)

were also weak spots on the Dow while

(MMM) - Get Report

Bank of America

(BAC) - Get Report

JPMorgan Chase

(JPM) - Get Report

and

Exxon Mobil

(XOM) - Get Report

led it higher. The Dow saw volume of 175 million, compared with an average of 200 million.

Meanwhile, the

New York Stock Exchange

had a listed volume of 4.5 billion. Most active shares included

Citigroup

, Bank of America and

Ford

(F) - Get Report

Charles Schwab

(SCHW) - Get Report

said it will pay $200 million to settle a class action lawsuit related to its YieldPlus Fund, according to a release. Shares traded 1.2% higher today.

Shares of Citigroup, which held its

annual meeting one day after posting a

surprise quarterly profit Monday, added another 9 cents, or 1.8%, to $4.97.

>>Overview

>>The Economy

>>Commodities and the Dollar

>>Treasuries