Stocks Mixed; Dow Closes Above 14,000
NEW YORK ( TheStreet) -- Major U.S. stock averages traded mixed Tuesday as Apple(AAPL) shares tumbled after CEO Tim Cook spoke at a technology conference and investors awaited President Barack Obama's State of the Union address Tuesday night.
Apple fell 2.5% after Cook, speaking at the Goldman Sachs Technology and Internet Conference in San Francisco, dismissed hedge fund manager David Einhorn's lawsuit against the tech giant as a "silly sideshow."
Apple's plans for its $137 billion cash hoard came under attack last week by Einhorn, who's been asking shareholders to fight against the company.
In addressing questions about the company's product features, Cook said the only thing Apple will never do is make a "crappy" product.
The Dow Jones Industrial Average closed up 47 points, or 0.3%, to 14,019. The blue-chip index reclaimed its position above 14,000 for the first time since Feb. 1.
Coca-Cola posted fourth-quarter earnings of 45 cents a share, topping estimates by a penny. Revenue came in light at $11.46 billion, below the average analyst estimate of $11.54 billion. Volumes fell in Europe, reflecting the ongoing macroeconomic uncertainty and weak consumer confidence across the region. Shares fell 2.7%.
Most sectors in the broader market were in the green, led by capital goods, financials, conglomerates and consumer cyclical shares. Only the technology sector closed in the red.
Volumes totaled 3.38 billion shares on the New York Stock Exchange and 1.78 billion shares on the Nasdaq. Advancers outpaced decliners by a ratio of 1.8-to-1 on the Big Board and 1.6-to-1 on the Nasdaq.
Obama's speech Tuesday night is expected to partly focus on the need for budget reform, as the sequestered spending cuts totaling about $85 billion are scheduled to take effect in just two weeks. There's "little apparent opportunity for compromise before then," according to David Joy, chief market strategist at Ameriprise.
"Should the scheduled cuts take effect, we do not think they will represent a 'game changer' for the U.S. economy, but they will act as a drag and will raise the risk that growth in 2013 will disappoint," said Russ Koesterich, global chief investment strategist at BlackRock, in a note. "As we get closer to the March 1 sequester deadline, we do expect to see higher levels of financial market volatility as investor attention returns to the country's fiscal drama."
The Congressional Budget Office estimated that if the sequester does kick in as scheduled, the budget deficit will shrink this year to $845 billion, or 5.3% of gross domestic product, the smallest since 2008. At the same time, federal debt held by the public will reach 76% of GDP by the end of this fiscal year, the largest share since 1950.