By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Apple Inc. first-quarter earnings in focus
U.S. stocks struggled to maintain modest gains on Monday, with
the S&P 500 and Nasdaq Composite retreating from records set on
Friday.
The S&P 500 (SPX) was down 2 points at 2,115.39. The Nasdaq
Composite (RIXF) was down 16 points, or 0.1%, to 5,086. The Dow
Jones Industrial Average (DJI) was also moving south and traded
flat at 18.087.
Kate Warne, investment strategist at Edward Jones, said
investors are relieved that earnings aren't as bad as feared. But
noted that the market is cautious ahead of the Fed meeting this
week.
"The stock market performance this earnings season is all about
numbers beating lowered expectations. There is also less worry
about Greece, while a combination of better economic news and ECB's
quantitative easing are underpinning prices," Warne said.
Investors remain optimistic about results from the largest
company in the world, in terms of market capitalization, Apple Inc.
(AAPL) , which is expected to report after the opening bell. Shares
in the tech juggernaut rallied 2%.
Need to know: Apple's report poised to rip through this
vulnerable market
(http://www.marketwatch.com/story/apples-report-poised-to-ripple-through-this-vulnerable-market-2015-04-27)
"Judging by the moves in the tech giant last week, the market
believes the eight consecutive quarterly earnings beats will
continue. Expect a sizable increase to its previously announced
buyback," said Chris Weston, chief market strategist at IG, in a
note.
Strategist: Here's why tech stocks deserve to be loved
(http://www.marketwatch.com/story/strategist-heres-why-tech-stocks-deserve-to-be-loved-2015-04-24)
Analysts expect Apple to report fiscal second-quarter earnings
of $2.15 a share and revenue of $55.75 billion. Analysts have grown
increasingly bullish on Apple, with momentum building surrounding
its Apple Watch and better-than-expected sales of its iPhone 6
models. Read: What to watch for in Apple's earnings
(http://www.marketwatch.com/story/what-to-watch-for-in-apples-earnings-2015-04-23)
(http://www.marketwatch.com/story/what-to-watch-for-in-apples-earnings-2015-04-23)Also
read: Apple, energy, health care earnings to dominate week
(http://www.marketwatch.com/story/apple-energy-health-care-earnings-to-dominate-week-2015-04-26)
(http://www.marketwatch.com/story/what-to-watch-for-in-apples-earnings-2015-04-23)A
Fed meeting and data: The economic calendar heats up midweek, with
a preliminary reading on first-quarter gross domestic product due
on Wednesday. Also on Wednesday, Federal Reserve policy makers will
deliver an updated policy statement after the conclusion of the
central bank's two-day meeting.
Signe Roed-Frederiksen, senior analyst at Danske Bank, said one
thing that could come from the Federal Reserve is an emphasis that
a soft patch in U.S. growth has been caused by temporary
factors.
"Market participants have adjusted their expectations of a first
fed funds rate hike from October December/January, and we believe
that the statement could reverse some of this move," said
Roed-Frederiksen. The analyst added that this week's data "should
also work in the direction of an upward shift in the expected path
for the fed funds rate."
Read: Will the economy roar back after a rocky start to the
year?
(http://www.marketwatch.com/story/will-economy-roar-back-after-rocky-start-to-the-year-2015-04-26)
Stocks to watch: Shares of Applied Materials Inc.(AMAT) dropped
more than 7% after the company decided to abandon its merger plan
with Tokyo Electron Ltd., citing problems with the U.S. Department
of Justice.
Shares of iGATE Corp.(IGTE) rose 3.5% after French computer
services and tech group Capgemini said it would buy its U.S. peer
for $4 billion
(http://www.marketwatch.com/story/capgemini-buys-igate-for-4-billion-2015-04-27-2485842).
Shares of Marvell Technology Group Ltd.(MRVL) were off 2% after
the company warned Friday that revenue will be weaker than expected
(http://www.marketwatch.com/story/marvell-technology-warns-revenue-will-be-weaker-2015-04-24).
U.S.-listed shares of Deutsche Bank AG(DB) were down 4% after
Germany's biggest bank reported over the weekend that its profit
halved on litigation costs
(http://www.marketwatch.com/story/deutsche-bank-profit-halves-on-litigation-costs-2015-04-27)
and said Monday it will scale back its investment banking
(http://www.marketwatch.com/story/deutsche-bank-to-trim-its-investment-banking-2015-04-27).
Shares of Celladon Corp.(CLDN) slid 79% to $2.92 after the
biotech company said over the weekend that a trial of its heart
failure treatment missed its primary and secondary endpoints.
Shares are set to open at the lowest level since the company went
public in January 2014.
Other markets: Deutsche Bank did its part to keep European
stocks (http://www.marketwatch.com/storyno-meta-for-guid) from
rising much, with those markets also pressed by continuing debt
troubles out of Greece.
Read: Some Europe ministers suggest 'Plan B' if Greece talks
fail
(http://www.marketwatch.com/story/some-europe-ministers-suggest-plan-b-if-greece-talks-fail-2015-04-27)
(http://www.marketwatch.com/story/some-europe-ministers-suggest-plan-b-if-greece-talks-fail-2015-04-27)The
Hong Kong Hang Seng Index and Shanghai Composite Index stocks both
rallied on Monday, hitting new seven-year highs separately, led by
oil and shipping stocks that surged on reports about possible
mergers between several of China's largest state-owned firms.
(http://www.marketwatch.com/story/some-europe-ministers-suggest-plan-b-if-greece-talks-fail-2015-04-27)Oil
prices
(http://www.marketwatch.com/story/oil-futures-edge-lower-as-dollar-creeps-higher-2015-04-27)(CLM5)
eased, and gold (GCM5) edged higher, while the dollar (DXY) traded
higher against most of its G-10 rivals.
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