Stocks traded in the red for most of the session on Wednesday, but a move higher in the afternoon allowed the Dow Jones Industrial Average (^DJI 0.06%) to eke out a gain even as the S&P 500 (^GSPC -0.22%) index finished slightly lower.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow |
0.04% |
8.01 |
|
S&P 500 |
(0.13%) |
(3.04) |
Data source: Yahoo! Finance.
Financial stocks saw some of the heaviest trading, and the Financial Select Sector SPDR ETF (XLF 0.35%) beat the broader market with a 0.8% increase. Gold prices dipped by over 1%, which helped send the bullish bet on the precious metal, VanEck Vectors Gold Miners ETF (GDX 0.60%), down 1%.
As for individual stocks, Apple (AAPL -0.57%) and Groupon (GRPN -0.61%) both attracted heavy investor interest in the wake of their quarterly earnings reports.
Image source: Getty Images.
Apple keeps growing
Apple shares held close to all-time highs after the tech giant announced that it had earned $11 billion in its fiscal second quarter, which translates into $2.10 per share of profit -- up 10.5% over the prior year. Revenue came in at $52.9 billion, or just above the middle of the guidance range that CEO Tim Cook and his team issued in January.
Gross margin was 38.9% of sales, also within the company's earlier forecast thanks to improving average selling prices in the iPhone business and booming results out of the services segment. "We are proud to report a strong March quarter," Cook said in a press release, "with revenue growth accelerating from the December quarter and continued robust demand for iPhone 7 Plus."
Image source: Apple.
Apple had some good news for income investors, as the company hiked its dividend payout by 10.5% to $0.63 per share. It also increased its share repurchase authorization after returning $10 billion to shareholders through dividends and stock buybacks during the quarter. Apple's fiscal third-quarter forecast projects continued growth as revenue rises to between $43.5 billion and $45.5 billion from the prior year's $42.4 billion. On the product front, investors can look forward to the annual developer's conference in June and a refreshed iPhone release announcement in the fall.
Groupon's international stumble
Shares of deals specialist Groupon fell 13% following the release of the company's first-quarter earnings. Revenue dipped 4% to $673.6 million, while consensus estimates were targeting $722 million. The key driver behind the slump was a choice by the executive team to increase profitability at the expense of revenue growth in the U.S. market. That geography shrank revenue by 5% but increased profit by 2%. "We are increasingly focusing the business on initiatives that are intended to maximize gross profit," management explained in a press release. Those shifts, they said, "had an unfavorable impact on North America revenue." Groupon also stumbled in the international segment, which added no new users and experienced a 15% drop in gross profit. Overall, the company continued to operate in the red, generating a $24.4 million net loss.
Executives left their full-year profit forecast unchanged. However, they said that their goal of producing a turnaround in the international segment following their exiting of 11 more markets is proving harder to deliver. The rebound effort will likely take "a few more quarters than expected," they explained in an investor presentation, and so gross profit might end up at the low end of the target range of between $1.3 billion and $1.35 billion this year.
