By Chris Dieterich
An upbeat earnings report from Apple powered gains in technology
shares on Thursday, though weak results from several blue chips
weighed on the Dow Jones Industrial Average.
The S&P 500 added three points, or 0.1%, to 1879, while the
Dow industrials fell one point, or 0.1%, to 16502 in afternoon
trading. On Wednesday, the Dow closed 0.5% below its Dec. 31 record
closing high of 16576.66.
The tech-oriented Nasdaq Composite Index climbed 21 points, or
0.5%, to 4148, on course for its seventh advance in eight
sessions.
Apple, the biggest U.S. company by stock-market value, late
Wednesday reported better-than-expected fiscal-second-quarter
earnings and revenue. Shares rose 8.1% after the company also
increased its stock-buyback program, raised its dividend and
announced a seven-for-one stock split.
Apple's report helped to soothe investors who have been hit hard
in recent weeks by declines in fast-moving tech and biotechnology
stocks. The Nasdaq finished Wednesday with a 2.4% loss over the
past month.
Apple's earnings report "certainly helps bring people back to
the tech sector," said Robert Pavlik, chief market strategist at
Banyan Partners, which oversees $4.5 billion in assets. It
"refocuses them on the fact that there is still value to be had
there," he said.
With 41% of the S&P 500 having reported first-quarter
results through midday Thursday, overall earnings per share are now
seen falling 0.2% from year-ago levels, according to FactSet,
compared with expectations of a 1.4% decline when earnings season
started a little over two weeks ago.
Stocks got off to a slow start in April amid concerns about soft
corporate earnings and weak readings on the U.S. economy. Traders
said stock gains in recent days show that most investors are
holding firmly to their stock positions.
"For all the concerns at the beginning of April, here we are
just a couple points away from new highs," said Ryan Larson, head
of equity trading at RBC Global Asset Management. "It has almost
been a complete round trip."
"Earnings have helped, this flurry of M&A activity has
helped," he said, referring to a recent uptick in mergers and
acquisitions this week.
Zimmer Holdings surged 11% on Thursday after the company said it
agreed to buy privately held orthopedic-device maker Biomet Inc.
for about $13.35 billion in cash and stock.
Earlier in the week, William Ackman's Pershing Square Capital
Management and Valeant Pharmaceuticals disclosed an offer to buy
Botox maker Allergan, and GlaxoSmithKline and Novartis announced a
series of transactions, including Novartis' $14.5 billion purchase
of Glaxo's oncology unit.
Shares of Facebook swung between gains and losses after the
social network late Wednesday topped first-quarter earnings and
revenue forecasts. Shares fell 0.3% in recent trading.
U.S. stocks briefly turned lower early on Thursday after news
reports that the Russian military was launching new exercises along
Ukraine's border.
Gold futures jumped and other haven investments, such as
Treasurys and the yen, also got a boost. These assets, which
investors see as safer than stocks and other bets that are more
sensitive to various risks, later pared gains.
Yousef Abbasi, New York-based market strategist at brokerage
JonesTrading Institutional Services, said that after sharp declines
in March and early April for previously highflying stocks, many
short-term traders have itchy trigger fingers.
"The fast money is still on edge," Mr. Abbasi said. "There
certainly is some tension out there: The market is holding near
all-time highs, and when nerves set in, people take profits."
Elsewhere, 3M slipped 0.9% after results came up a bit shy of
forecasts.
Caterpillar gained 1.9%, after exceeding earnings and revenue
estimates.
Verizon Communications fell 2.8% after the company said its
profit more than doubled in the first quarter, but added fewer
postpaid subscribers than rival AT&T, which reported earlier
this week.
Qualcomm slumped 3.8% after better-than-expected fiscal
second-quarter earnings were overshadowed by disappointing revenue
and a downbeat current-quarter earnings outlook.
General Motors fell 1% after the auto maker's first-quarter
results fell 82% but far exceeded Wall Street's expectations.
Falling prices for 10-year Treasury notes pushed up the yield to
2.690%, from 2.686% late Wednesday. Gold futures added 0.5% to
$1,291.50 a troy ounce.
Investors digested mixed U.S. economic data. Initial claims for
jobless benefits rose 24,000 to 329,000 in the latest week, versus
expectations of 315,000. Separately, durable-goods orders in March
increased 2.6% on the month, the biggest gain in four months,
exceeding forecasts of a 2% rise.
In Europe, the Stoxx Europe 600 ended a choppy session up 0.3%.
Worries about tension in Ukraine sent Russia's MICEX index down
2.2%.
Asian markets were mostly lower, with China's Shanghai Composite
falling 0.5%, the fifth loss in six sessions, and Japan's Nikkei
Stock Average shedding 1%.
Crude-oil futures added 0.5% to $101.89 a barrel, after
suffering the biggest two-day decline in six weeks through
Wednesday. The dollar fell against the euro and the yen.
Write to Chris Dieterich at christopher.dieterich@wsj.com