The markets finished strong Tuesday as the Nasdaq extended its winning streak to 10 days. The Dow Jones Industrial Average tacked on 67.79, or 0.77%, to 8,915.94, while the S&P 500 rose 3.45, or 0.36%, to 954.58. The Nasdaq was up 6.91, or 0.36%, to 1,916.20. Melissa Lee said on CNBC's "Fast Money" TV show that Apple ( AAPL) was up more than 5% in after-hours trading after it beat earnings and revenue expectations. Jim Goldman, a CNBC reporter, said Apple posted its best ever non-holiday quarter, adding iPhone revenue eclipsed iPod revenue for the first time. For a technical breakdown of stocks recently seen on "Fast Money," check out Dan Fitzpatrick's "3 Stocks I Watch on TV."
Goldman also said the company's guidance, as expected, was conservative, though less conservative than in the past. Also, in a "big time surprise," Apple was able to maintain a hefty margin of 36.3% for the quarter, he said. Goldman said half the Macs sold in quarter were to first-time buyers as Apple continues to make impressive moves to expand market share. He also said Apple stores are clicking, with sales up 30% year over year. According to Goldman, Apple said it is pleased with the inroads it's making into the enterprise space. The company said 20% of Fortune 500 companies have bought 10,000 or more iPhones. He also said Apple is working on an iPod Touch that would feature a camera and a Wi-fi connection to make mobile video conferencing possible.
3 Stocks I Saw on TV
Pete Najarian said it's "incredible" that Apple has been able to execute so well in such tough economic times. Sitting on a conference call on Yahoo! 's ( YHOO) earnings, Jon Najarian said the company's CEO Carol Bartz was upbeat, touting Yahoo! as the No. 1 online media company in the world with sports, finance and business as key drivers. He said Yahoo! has launched a home page that will sync with mobile phones. He said her optimistic tone is just exactly what investors want to hear. Seymour said Yahoo!'s steps in improving its margins and profits along with cutting non-operational projects leads him to believe it is sprucing up the store for something in the second half. Shifting to Caterpillar ( CAT), which helped move the markets higher, Seymour said the best thing about the company's conference call was what it said about the recovery of the U.S. portion of its business. He also said the stabilization of the credit markets is triggering a pickup in orders. Pete Najarian said Caterpillar's showing will help Bucyrus International ( BUCY) and Joy Global ( JOYG), which, he said, should explode. He said the latter two are much more attractive stocks because of their low P/Es. Grasso said everyone he spoke to today about Caterpillar 's 7.67% gain in stock price said it was the result of a short squeeze. Lee shifted to the financials, which held back the markets. Commenting on the decline in Morgan Stanley ( MS) ahead of its earnings, Karen Finerman said it was affected not only by its exposure to commercial real estate loans but its reticence to take on the risk levels that Goldman Sachs undertook so successfully.
Seymour remained high on Morgan Stanley, especially its credit markets division and its asset management business. "I think it's going to be a very profitable company," he said. Shifting to the financials, Chris Mutascio, a managing director with Stifel Nicolaus, said he's seeing the early stages of the commercial real estate real problems plaguing the banking sector. He said he starting to see some issues developing at retail strip malls and income producing properties He noted that Regions Financial ( RF), which was down 15% today on a worse-than- expected loss, reported non-performing assets and restructured loans totaling $1.7 billion. By contrast, he said Wells Fargo ( WFC) is in a better position because it has revenue growth to offset higher costs of credit. He said the regional banks aren't in those capital markets and don't have mortgage pipelines. Finerman said the move by Barnes & Noble ( BKS) to open a e-book store could work if Borders were to go under. For the stock of the day, Pete Najarian picked Intuitive Surgical ( ISRG). He said the company, which makes robotic systems for surgery, is relatively cheap and offers some upside, especially if the economy improves. Richard Bernstein, CEO of Richard Bernstein Capital Management, expressed fears of a slow growing deflationary economy. He said the fiscal stimulus is basically a good tool but there's been a lot of waste. In the final trades, Seymour was long United States Natural Gas ( UNG) while Grasso was long UnitedHealth ( UNH). Finerman was short Borg-Warner ( BWA). Najarian liked Joy Global ( JOYG). "Check out "'Fast Money' Portfolios of the Week" on Stockpickr every Thursday