Courtesy of Scott Martindale, Sabrient Systems and Gradient Analytics
Apple. Need I say more?
Well, perhaps just a few more words are in order. With markets showing concern about renewed debt worries and recession in Europe and signs of economic slowing both in China and the U.S., Apple (AAPL) stepped up to the earnings plate and smacked a grand slam on the first pitch. It pulled up its shades at the poker table and offered up a royal flush without taking another card. It stood at the microphone in the finals of American Idol and delivered a virtuoso performance without a single pitchy note, dog. It…well, you get the idea.
Indeed, AAPL had pulled back quite a bit of late, falling 14% from its 52-week high of $644 in just two weeks, as many investors felt that the stock’s price had run so far so fast this year that it would be hard-pressed to have anything to say that would ignite further enthusiasm. But the company came through with flying colors, showing 59% year-over-year sales growth and 94% profit growth…and the stock rose an incredible 9% on Wednesday to close back above $600 and gain nearly $47 billion in market cap in just one day. In fact, there are only about 100 U.S.-listed stocks having a total market cap larger than what Apple gained in just one day.
Not to be outdone, Fed Chairman Bernanke got in on the act, stating that inflation remains subdued, the ultra-low fed funds rate will stay put, and the Fed stands ready to take additional stimulative actions as needed to keep the economy on the path of recovery
With Uncle Ben in their camp and AAPL leading the way like Rudolph in a blizzard, bulls took it as a green light to resume putting cash into stocks. Last week, I discussed the imminent June expiration of “Operation Twist,” and how all stock gains for the past three years have come during Fed stimulus programs. So, bulls were encouraged to hear Chairman Bernanke hint that more is in store.
The Dow, Nasdaq, and S&P 500 are again well above key support levels at 13,000, 3,000, and 1370, respectively. With AAPL composing over 11% of the Nasdaq Composite and over 17% of the Nasdaq 100, it comes as no surprise that these were the biggest gaining indexes on Wednesday, up 2.3% and…
