S&P rises for seventh day but 1,500 too steep a climb

NEW YORK Thu Jan 24, 2013 4:45pm EST

1 of 2. Traders work on the floor of the New York Stock Exchange, January 23, 2013.

Credit: Reuters/Brendan McDermid

Related Video

NEW YORK (Reuters) - The smallest of gains gave the Standard & Poor's 500 its seventh straight winning day on Thursday, but the index failed to hold above the 1,500 line, restrained by Apple's worst day in more than four years.

Apple Inc (AAPL.O) slid 12.4 percent 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 $60 billion in Apple's market capitalization to less than $423 billion, leaving the company vulnerable to losing its status as the most valuable U.S. company to second-place ExxonMobil (XOM.N), at $416.5 billion.

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 in New York.

The S&P 500 briefly traded above 1,500 for the first time since December 12, 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 U.S. 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 euro-zone 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 .DJI rose 46 points or 0.33 percent, to 13,825.33 at the close. The S&P 500 .SPX inched up just 0.01 of a point, or 0 percent, to finish at 1,494.82. The Nasdaq Composite .IXIC dropped 23.29 points or 0.74 percent, to end at 3,130.38, with most of that loss on Apple's slide.

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

Video streaming service Netflix Inc (NFLX.O) surprised Wall Street with a quarterly profit after it added nearly 4 million customers in the United States and abroad. Netflix shares surged 42.2 percent to $146.86, its biggest percentage jump ever.

Earnings have helped drive the stock market's recent rally. Thomson Reuters data through early Thursday showed that of the 133 S&P 500 companies that have reported earnings so far, 66.9 percent have exceeded expectations - above the 65 percent average over the past four quarters.

About 6.8 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average during January 2012 of about 6.93 billion shares.

Roughly five issues rose for every four that fell on both the NYSE and Nasdaq.

(Editing by Jan Paschal)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (6)
billyb7 wrote:
I resent those analysts who project Apple’s Earnings and then say that Apple “missed” the target. Apple didn’t miss – the analysts missed! These so-called experts arrogantly make predictions and then they blame Apple rather than themselves for the “miss.” Why anyone pays these guys to make forecasts is beyond me.

Jan 24, 2013 9:07am EST  --  Report as abuse
BlueOkie wrote:
So much for a one trick pony

Jan 24, 2013 10:28am EST  --  Report as abuse
Yashmak wrote:
billyb7, the analysts determined sales/orders figures Apple needed to meet to achieve growth. That Apple failed to meet those levels of sales is is the reason for the decline in value of their stock. It’s indicative of a continuing decline in their market share for smartphones (among other things).

People pay those guys to make forecasts because those forecasts are valuable, and usually fairly accurate, indicators of the health of a company. Apple’s investors want to know, for instance, if Apple’s sales and market share are growing or declining.

Jan 24, 2013 12:46pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Retirement Road Map