Tech Companies Lift Dow Jones to Five-Year High
Technology companies were the driving force behind the Dow Jones industrial average reaching a five-year high on Wednesday, closing at 13,799.33 after rising 67.12 points (0.5 percent). Solid fourth quarter earnings were posted by both Google and IBM late Tuesday, surprising many investors who expected tech companies to battle to meet targets at the end of the year. Buoyed up by sales of software services to Russia and Brazil, members of BRICS, IBM’s results exceeded expectations and the tech giant was the Dow’s top mover, gaining $8.64 to close at $204.72. The company also increased its earnings outlook for 2013. Google rose $38.63 to close at $741.50 after reporting higher earnings than anticipated.
When announcing Apple’s holiday quarter earnings on Wednesday, CEO Tim Cook noted that the company is thrilled with its revenue of over $54 billion, and sales of more than 75 million iOS devices, and expressed his confidence in Apple’s product pipeline as they continue to ‘focus on innovation and making the best products in the world.’ But Wall Street appeared not to be impressed with Apple’s posted revenue of $54.5 billion, as it was expecting $54.7 billion, despite the fact that Apple had forecast $52 billion in October, and was even less impressed when Apple revealed that for the quarter ending March 2013, it expects to generate revenue of between $41 Billion and $43 billion – Wall Street has forecast revenue of $45.6 billion. Apple’s stock dropped $52.54 to $461.47 (10.22 percent) in after-hours trading. Apple’s Board of Directors has declared a common stock cash dividend of $2.65 per share payable on February 14. Consumers bought 47.8 million iPhones, 22.9 million iPads, 4.1 million Apple Macs and 12.7 million iPods. China accounted for 15 percent ($6.8 billion) of Apple’s revenue in the last quarter and is considered to be the fastest growing market for the company’s products. China’s Xinhau News Agency reported earlier this month that Apple’s CEO noted in an interview that he believes China will eventually become the largest market for Apple products.