Wall St inches higher despite Apple’s plunge

THE smallest of gains gave the Standard & Poor’s 500 its seventh straight winning day yesterday, but the index failed to hold above the 1,500 line, restrained by Apple’s worst day in more than four years. Apple slid 12.4 per cent to $450.50 a day after it posted revenue that missed Wall Street’s forecast as iPhone sales were poorer than expected.

The sharp drop wiped out nearly $60bn in Apple’s market capitalisation to less than $423bn, leaving the company vulnerable to losing its status as the most valuable US company to second-place ExxonMobil, at $416.5bn.

The S&P 500, however, managed to hit its longest winning streak since October 2006. “The market has sent the message it is no longer driven by the whims of Apple,” said Ken Polcari, director of the NYSE floor division at O'Neil Securities.

The S&P 500 briefly traded above 1,500 for the first time since 12 December 2007, but failed to hold above it, indicating that momentum is waning and a pullback is in the charts.

“If the market had a little bit more excitement to it, momentum players would have jumped after it broke through 1,500. Investors know the market is a little bit ahead of itself,” Polcari said.

Economic data helped buoy equities as US factory activity grew the most in nearly two years in January and new claims for jobless benefits dropped to a five-year low last week, giving surprisingly strong signals on the economy's pulse. At the same time, Chinese manufacturing grew this month at the fastest pace in about two years, while data suggesting German growth picked up boosted hopes for a Eurozone recovery. “PMI in Asia, Europe, and obviously, here in the United States, is moving in the right direction, and that’s stuff people should be excited about,” Polcari said.

The Dow Jones industrial average rose 46 points or 0.33 per cent, to 13,825.33 at the close. The S&P 500 inched up just 0.01 of a point, or 0 per cent, to finish at 1,494.82. The Nasdaq Composite dropped 23.29 points or 0.74 per cent, to end at 3,130.38, with most of that loss on Apple’s slide.

The broader Russell 2000 index also hit a milestone as it closed above 900 points for the first time.

Video streaming service Netflix surprised Wall Street with a quarterly profit after it added nearly 4m customers in the United States and abroad. Netflix shares surged 42.2 per cent to $146.86, its biggest percentage jump ever.

Earnings have helped drive the stock market’s recent rally. Thomson Reuters data through early yesterday showed that of the 133 S&P 500 companies that have reported earnings so far, 66.9 per cent have exceeded expectations – above the 65 per cent average over the past four quarters. In total 6.8bn shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT.