Stocks Rise on Earnings; Apple Wows After Close

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) 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%.

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.

Company News

Goldman Sachs ( GS), 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.
Goldman Sachs

In other earnings news, Delta Air Lines ( DAL) 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) and U.S. Bancorp ( USB) 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) 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) 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) 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 3M ( MMM), Bank of America ( BAC), JPMorgan Chase ( JPM) and Exxon Mobil ( XOM) 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 ( C), Bank of America and Ford ( F).

Charles Schwab ( SCHW) 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.

Commodities and the Dollar

Increasing energy futures were giving a lift to related equities today, making energy one of the leading stock sectors during the session. The May crude contract added $2 to settle at $83.45 a barrel while the more actively traded June crude oil contract settled 72 cents higher at $83.85.

Elsewhere in commodities, the June gold contract traded $3.40 higher at $1,139.20 an ounce.

The dollar was trading higher against a basket of currencies, with the dollar index up by 0.1%.


The benchmark 10-year Treasury gained 3/32, diluting the yield to 3.794%.

The two-year note fell 2/32, lifting the yield to 1.012%. The 30-year bond rose 13/32, diluting the yield to 4.671%.

--Written by Melinda Peer and Sung Moss in New York.

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