Wall Street ends flat on Apple picking, but off for week(Reuters)
October 26. 2012 7:02PM
NEW YORK - U.S. stocks finished flat on Friday, recovering from moderate declines as bargain hunters rushed in to buy Apple and other stocks recently battered by disappointing results.
For the week, though, stocks slid, following a series of weak results, especially from U.S. multinational companies.
Apple's stock pulled back sharply from the session low, although it still ended down 0.9 percent at $604. The world's largest publicly traded company surprised analysts late Thursday with its weak margin outlook, as well as with its quarterly earnings and iPad sales that fell short of expectations. The stock had fallen as low as $591 in Friday's session.
A semiconductor index was up 0.5 percent as a number of companies, including Intel, bounced back from losses last week, when the dominant chipmaker reported net earnings and revenue that missed estimates. Intel shares rose 1.2 percent to $21.95 on Friday.
'As people chose to buy the dips in Apple, I think that gave people a little bit more conviction to buy other names,' said Michael James, senior trader at Wedbush Morgan, in Los Angeles.
'You've also had a continued theme of buying semiconductor stocks after disappointing earnings. That's frustrating those that are short and has led to continued covering.'
Investors had a muted reaction to U.S. data showing a slightly better-than-expected pace of growth for the economy. The 2 percent annual rate of growth for U.S. gross domestic product for the third quarter confirmed analysts' views that the economic recovery will be slow.
The Dow Jones Industrial Average edged up 3.53 points, or 0.03 percent, to 13,107.21 at the close. The Standard & Poor's 500 Index dipped 1.03 points, or 0.07 percent, to finish at 1,411.94. The Nasdaq Composite Index gained 1.83 points, or 0.06 percent, to end at 2,987.95. For the week, the Dow was down 1.8 percent, the S&P 500 was down 1.5 percent and the Nasdaq was down 0.6 percent.
Lighter revenues have been a concern this earnings season. Just 36.9 percent of S&P 500 companies so far have reported revenue that beat forecasts, compared with the 62 percent that typically exceed expectations, according to Thomson Reuters data.
Earnings have fared better, with 62.5 percent above expectations - almost even with the 62 percent that is historically seen.
Amazon.com Inc escaped the market's malaise, climbing 6.9 percent to $238.24 as analysts said the online retailer's spending will hurt margins, but boost profit in the long run.
Some of investors' attention on Friday may have been diverted from the market to following news about Hurricane Sandy, which could make landfall along the East Coast, including New York, early next week. By Friday afternoon, the storm had killed at least 41 people as it tore across the Caribbean.
The New York Stock Exchange said it plans on business as usual, adding that it has contingency plans to keep the market running - relying on back-up power generation facilities, if necessary. The NYSE also said in a statement that it will make accommodations for critical staff and traders.
In addition, NASDAQ OMX said in a statement that it has plans to make sure its systems are ready, noting that it will be regularly communicating with its members before, up to and after the storm.
Volume was moderate on Friday, with about 6.02 billion shares traded on the NYSE, the Nasdaq and the NYSE MKT.
Decliners outnumbered advancers on the NYSE by a ratio of about 17 to 12. On the Nasdaq, about seven stocks fell for every five that rose.