The Dow Jones Industrial Average (DJIA) is pointed lower ahead of the bell, with lackluster guidance from Boeing (BA) weighing on the blue chips. In addition, Wall Street is awaiting the Federal Open Market Committee's (FOMC) latest policy decision, as well as the central bankers' first publicly released forecast for short-term rates. However, the Nasdaq Composite (COMP) is once again set to take the road less traveled, with stronger-than-expected earnings from Silicon Valley titan Apple Inc. (AAPL) providing a pre-market halo lift for tech stocks.
In earnings news, Apple Inc. (AAPL - 420.41) reported fiscal first-quarter earnings of $13.1 billion, or $13.87 per share – up 118% from the $6 billion, or $6.43 per share, earned a year ago. Revenue, meanwhile, skyrocketed 73% to a record $46.3 billion. The results handily topped Wall Street's expectations for earnings of $10.08 per share on sales of $38.85 billion. The company said it sold 37.04 million iPhone units in the latest quarter, more than doubling from a year prior, and surpassing even the most aggressive analyst estimates, which averaged around 30 million units. Looking ahead, AAPL projected fiscal second-quarter earnings of $8.50 per share on revenue of $32.5 billion. Analysts, on average, are calling for a current-quarter profit of $8.04 per share on sales of $32.1 billion. At last check, AAPL is set to soar 7.8%.
Yahoo (YHOO - 15.69) reported a fourth-quarter net income of $295.57 million, down from $312.02 million in the year-ago period. On a per-share basis, earnings remained flat at 24 cents, while adjusted earnings came in at 25 cents per share -- compared to 26 cents per share in the previous year. Meanwhile, revenue fell 13% to $1.32 billion. Excluding traffic acquisition costs, sales dropped 3% to $1.17 billion. Analysts, on average, were expecting an adjusted profit of 24 cents per share on revenue of $1.19 billion. Looking ahead, YHOO is predicting fiscal first-quarter sales between $1.17 billion and $1.26 billion, representing a bolder view than Wall Street's forecast of $1.08 billion in revenue. Ahead of the bell, YHOO is 0.7% lower.
Finally, Boeing (BA - 75.36) reported fourth-quarter earnings of $1.39 billion, or $1.84 per share, up 20% from $1.16 billion, or $1.56 per share, in the year-ago quarter. Revenue edged 18% higher to $19.56 billion. Analysts, on average, were anticipating a slimmer quarterly profit of $1 per share on sales of $19.37 billion. For 2012, the blue chip projected earnings of $4.05 to $4.25 per share on revenue of $78 billion to $80 billion. For comparison, Wall Street is calling for a full-year profit of $4.90 per share on sales of $78.45 billion. In pre-market trading, BA is pointed 1% lower.
Today's earnings docket will also feature reports from United Technologies (UTX), Xerox (XRX), ConocoPhillips (COP), Delta Air Lines (DAL), US Airways (LCC), Hess Corp. (HES), E*Trade Financial (ETFC), SanDisk (SNDK), and Netflix (NFLX). Keep your browser at SchaeffersResearch.com for more news as it breaks.
The latest pending home sales data and the regularly scheduled crude inventories report will hit the Street today, though traders will most likely be consumed by the Federal Open Market Committee's (FOMC) interest-rate decision and Fed Chairman Ben Bernanke's post-meeting speech. Thursday's economic agenda heats up with reports on jobless claims, durable goods, new home sales, and the Conference Board's index of leading indicators. Finally, Friday wraps up with the government's fourth-quarter gross domestic product (GDP) estimate, as well as the final Thomson Reuters/University of Michigan consumer sentiment figures for January.
Equity option activity on the Chicago Board Options Exchange (CBOE) saw 1,166,736 call contracts traded on Tuesday, compared to 738,652 put contracts. The resultant single-session put/call ratio arrived at 0.63, while the 21-day moving average was 0.62.
The Case for Big Moves in IWM and QQQ
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