Stocks muddled as glow from Apple results fades

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Associated Press

Posted on April 21, 2010 at 6:07 PM

Updated Wednesday, Apr 21 at 6:07 PM

NEW YORK (AP) — The stock market stalled Wednesday after the glow of strong results at Apple Inc. and a few other companies faded.

The Dow Jones industrial average rose about 8 points, while broader indexes were mixed.

Technology and industrial shares drew buyers after Apple Inc. and Boeing Co. delivered results that topped expectations. Health care stocks lagged on concerns that new health care laws will hurt the industry's profits. Financial stocks also fell after traders speculated on the fallout from a potential overhaul of government regulations.

The good news on earnings wasn't enough to give the market much of a lift. Analysts caution that investors are starting to become accustomed to better earnings so even stellar numbers might not inject energy into stocks.

"This market is overbought and it really does need a little bit of a pullback. We're priced for perfection," said Burt White, chief investment officer for LPL Financial in Boston.

Some selling could come Thursday after a profit forecast from eBay Inc. disappointed investors after the closing bell. Shares of the online auction company fell 8 percent in after-hours electronic trading. Futures contracts for technology-dominated Nasdaq 100 index fell 0.3 percent after eBay's report.

Apple's earnings blew past analysts forecasts thanks to strong sales of iPhones, sending its stock up 6 percent. Apple was the latest in a string of technology companies to report improving profits as the economy recovers.

Industrial stocks rose after Boeing's first-quarter profit was stronger than expected and the aircraft maker said it plans to deliver its 787 by the end of the year. The stock rose 4 percent. United Technologies Corp.'s profit jumped and the parent of Otis elevators and Sikorsky Aircraft raised the lower end of its profit forecast. United Technologies climbed about 4 percent. Boeing and United Technologies are both among the 30 stocks that make up the Dow industrials.

Economic concerns eclipsed some of investors' enthusiasm over the improved earnings.

Traders grew cautious after Greece's borrowing costs jumped to record highs. Government officials in the debt-strapped country have begun discussions about the terms of a bailout plan from other eurozone countries and the International Monetary Fund. There is concerns that debt problems in Greece could spill over to other countries and jeopardize a recovery.

Investors also looked to Washington for insights into a proposed overhaul of the nation's financial regulations. There is concern among traders that the wrong mix of rule tightening could hamper profits at large financial companies. President Barack Obama plans to speak in New York City on Thursday to push for new restrictions.

The stock market has been rising for 13 months since major stock indexes hit 12-year lows. For more than two months there have been few interruptions in the advance. Many analysts say some break is needed to keep stocks from getting overheated.

The Dow rose 7.86, or 0.1 percent, to 11,124.92, its third straight advance. The Dow has risen nine of the past 10 days.

The broader Standard & Poor's 500 index slipped 1.23, or 0.1 percent, to 1,205.94. The Nasdaq composite index rose 4.30, or 0.2 percent, to 2,504.61.

About three stocks rose for every two that fell on the New York Stock Exchange, where consolidated volume came to 5.7 billion shares, compared with 5.3 billion Tuesday.

White said a recent increase in trading volume is a sign that investors who think the market has run too far are starting to make moves after months of not being able to fight the market's climb. The higher volume could signal a shift is looming.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.74 percent from 3.80 percent late Tuesday.

Howard Ward, chief investment officer of the GAMCO Growth Fund, said the money companies are now making again will boost the economy.

"You don't get the new jobs without the profits," Ward said. "Strong profits suggest that the employment news in the months ahead is going to be better than we've expected."

The dollar was mixed against other major currencies, while gold rose.

Crude oil 17 cents to settle at $83.68 per barrel on the New York Mercantile Exchange.

Apple rose $14.63, or 6 percent, to $259.22. The stock topped its previous record of $251.14 set Friday.

Boeing rose $2.75, or 3.9 percent, to $74.16, while United Technologies rose $2.73, or 3.7 percent, to $76.93.

Gilead Sciences Inc. slid $4.31, or 9.6 percent, to $40.76 after the drug developer late Tuesday lowered its full-year revenue forecast citing the new health care laws.

Wells Fargo & Co. fell 68 cents, or 2 percent, to $33.01 after its earnings slipped on soured consumer loans.

EBay fell $2.10, or 8 percent, to $24.17 following its forecast. The company said that its first-quarter earnings rose 11 percent after consumers stepped up spending. The stock slipped 11 cents to $26.29 in regular trading.

The Russell 2000 index of smaller companies rose 4.64, or 0.6 percent, to 726.19.

Britain's FTSE 100 fell 1 percent, Germany's DAX index fell 0.5 percent, and France's CAC-40 dropped 1.2 percent. Japan's Nikkei stock average rose 1.7 percent.

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