It was a day of mixed emotions as a combination of earnings and economic data whipsawed the broad-based S&P 500 (^GSPC 0.16%) around the unchanged line for much of the trading day.
Apple (AAPL 1.89%) set the stage for the market and tech sector by reporting its second-quarter results last night. The bottom-line figure topped Wall Street's estimate as Apple delivered 37.4 million iPhones and 19.5 million iPads during the quarter and increased its cash balance to a monstrous $145 billion. Further, the company boosted its share repurchase authorizations by 500% and raised its quarterly payout 15%. Still, its conservative third-quarter forecast fell short of estimates once again and the Street seems generally unimpressed with a suddenly giving Apple.
On the economic front, durable goods orders for March dipped 5.7%, their worst drop in seven months according to the Commerce Department. Weak orders could be an indication that economic momentum is waning and, despite housing and labor market gains, the recovery may be slowing down.
All told, investors managed to buck the negativity (just barely) and focused on the fact that a majority of S&P 500 components have managed to top estimates thus far. On the day, the S&P 500 finished fractionally higher by 0.01 points (0.00%) to close at 1,578.79.
Leading the charge higher is solar panel specialist First Solar (FSLR -2.82%), which advanced 11.8% after securing a deal to sell its 139MW Campo Verde solar farm to Southern Company and its partner Turner Renewable Energy. Utilities like Southern Co. are scrambling to incorporate renewable energies into their portfolio as the traditional costs of nuclear energy rise in price. First Solar continues to find itself in better shape each week as China's solar panel producers struggle under a molehill of debt, weak pricing, and U.S. tariffs on Chinese solar panels. With a treasure trove of backlogged deals, First Solar is realizing the benefits of producing highly efficient panels.
Independent oil and natural gas driller Newfield Exploration (NFX) jumped 7.4% after its first-quarter profit results topped the Street's expectations. For the quarter, Newfield reported an adjusted profit of $0.45 as its domestic liquids production jumped 9%. Analysts had only been anticipating a $0.44 profit. Looking ahead, Newfield forecast a 12% quarter-over-quarter increase in domestic liquids production. With Newfield valued at only nine times forward earnings -- even though it does have quite a bit of natural gas in its asset portfolio (44%) -- it could be primed for further upside.
Finally, KFC and Taco Bell owner Yum! Brands (YUM 0.53%) advanced 7% following better-than-expected first-quarter earnings results. No one on Wall Street expected a great quarter to begin with from Yum! Brands given the avian flu scare in China and its previous ordeal concerning antibiotic levels in its chicken, but Yum! still delivered a much smaller profit decline than forecast. Same-store sales in China fell about 20%, yet the company still managed to deliver an adjusted profit of $0.70 per share, $0.10 ahead of estimates. In the U.S., it relied on 6% same-store sales growth at Taco Bell thanks to its expanded Doritos line of tacos. With the China scare likely a short-term growth inhibitor, Yum! looks poised to outperform over the long run.