Google Delights, Apple Disappoints with Results

On Wall Street, the S&P 500 rose for the sixth consecutive day on Wednesday, following better-than-expected quarterly earnings from Google and IBM, but the index’s ascent could be interrupted as Apple disappointed with its financial report after the market closed.

The Dow Jones increased by 67 points, or 0.47 percent, to 13,779 points, while the S&P 500 index rose by 0.15 percent to 1,494 points, marking new highs for these indices since December 2007. The Nasdaq index, on the other hand, strengthened by 0.33 percent to 3,153 points.

The rise in the indices is primarily attributed to the excellent business results of Google and IBM in the fourth quarter of last year, which positively impacted the entire technology sector. Google’s stock price jumped more than 5 percent, while IBM’s rose over 4 percent, leading the S&P technology sector index to strengthen by 1.2 percent.

Most other companies are reporting better quarterly results than expected, but it should be noted that not much is anticipated, given the weakness of the world’s largest economies. Of the 99 companies in the S&P 500 index that have so far released financial reports, 67.7 percent exceeded analysts’ expectations, which is above the average of 65 percent in the last four quarters.

According to Reuters data, earnings for companies in the S&P 500 index in the last quarter of last year have increased by 2.8 percent compared to the same period the previous year, which is higher than the 1.9 percent growth that was expected at the beginning of the quarterly earnings season.

The market was also positively influenced yesterday by the fact that the House of Representatives, where Republicans hold the majority, approved a plan that postpones the issue of raising the debt ceiling until mid-May. This has delayed the tug-of-war in Congress between Democrats and Republicans, similar to that of August 2011, which led to the first downgrade of the U.S. credit rating in history.

As a result, the S&P 500 index rose for the sixth consecutive day yesterday, approaching the psychologically significant level of 1,500 points. Additionally, it is now less than 5 percent away from its record levels. However, the question remains whether the rise in stock prices can continue, given that the results of companies are not particularly stellar, and yesterday, after the close of Wall Street, Apple disappointed.

In the last quarter of last year, iPhone sales were lower than estimated, leading to revenues for the tech giant being below expectations. The stock price of the largest U.S. company by market value plummeted about 8 percent in extended electronic trading.

On most European exchanges, stock prices rose yesterday. The London FTSE index strengthened by 0.30 percent to 6,197 points, while the Frankfurt DAX rose by 0.15 percent to 7,707 points. The Paris CAC, on the other hand, weakened by 0.40 percent to 3,726 points.