2ndUPDATE: Apple Surges Back Above $600, Erasing Most Of Recent Loss
April 25 2012 - 12:28PM
Dow Jones News
Shares of Apple Inc. (AAPL) surged back above $600 Wednesday as
Wall Street applauded the technology bellwether's strong quarterly
results.
The stock recently traded up 9.1% to $611.29, erasing in one
fell swoop much of what it lost over the previous 11 sessions. The
stock had been up as much as 10.3% at an intraday high of $618, the
highest price seen since April 18.
At current prices, the stock has retraced 67% of the decline
from its April 9 all-time closing high of $636.23. Ahead of the
earnings report, Tuesday's close of $560.28 was a six-week low.
A host of Wall Street analysts have helped fuel the gains by
suggesting the shares still have a lot further to rally.
Goldman Sachs bumped up Apple's price target to $850 from $750,
Wedbush Morgan lifted its target to $800 from $570, and Canaccord
Genuity raised its target to $775 from $740.
J.P. Morgan said "Apple remains in a league of its own," while
Gabelli & Co. said Apple's valuation "remains very
compelling."
Apple's rise far outpaced its peers', and the rally was having a
historic impact on the broader market. At one point Wednesday, the
stock's heavy weighting contributed about 6 points to the S&P
500-stock index's overall gain, or about one-third of its climb,
according to S&P Indices senior index analyst Howard
Silverblatt. An influence of that degree would be the biggest daily
impact Apple has ever had on the index.
The S&P 500 was recently up 14 points, or 1%, at 1386.
Meanwhile, the Dow Jones Industrial Average, which doesn't include
Apple as a component, was up 76 points, or 0.6%, at 13077.
In addition, shares of Apple suppliers also rose Wednesday. Chip
maker OmniVision Technologies Inc. (OVTI) gained 6.7% in
late-morning trade, on pace for its biggest increase since March 6.
Cirrus Logic (CRUS) climbed 8.7% and Broadcom Corp. (BRCM) added
5.1%.
Ahead of Apple's results, investors had grown increasingly
worried that iPhone sales might disappoint, as carriers Verizon
Communications Inc. (VZ) and AT&T Inc. (T) reported
year-over-year iPhone sales declines.
But Apple said after Tuesday's close that it sold 35.1 million
iPhone units last quarter, well above expectations of about 30
million. And earnings rose 94% from year-ago levels to $11.62
billion, or $12.30 a share, on revenue growth of 59%, to $39.19
billion.
Analysts surveyed by FactSet Research had been expecting, on
average, earnings of $10.16 a share on revenue of $36.96
billion.
Dave Rolfe, chief investment officer at Wedgewood Partners, said
it was a "classic dominant Apple quarter."
"The only chink in the armor, which is really not a chink at
all, iPad numbers came in in-line," Rolfe said.
-By Tomi Kilgore, Dow Jones Newswires; 212-416-2470;
tomi.kilgore@dowjones.com
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