Stock Futures Rise on Strong Apple Results
NEW YORK ( TheStreet) -- U.S. stock futures were pointing higher early Wednesday after Apple(AAPL) far exceeded Wall Street's expectations in its latest quarter, selling more than 35 million iPhones.
The news was setting an optimistic tone for trading ahead of the Federal Reserve's upcoming policy announcement, which is due at 12:30 p.m. ET. Fed Chairman Ben Bernanke will meet the press after the announcement, adding to the drama of the day.
Futures for the Dow Jones Industrial Average were up by 35 points, or 51.4 points above fair value, at 12,994. Futures for the S&P 500 were 8.1 points higher, or 10.5 points above fair value, at 1378, and futures for the Nasdaq were ahead by 50.5 points, or 48.7 points above fair value, at 2683.
Futures hardly reacted to a weak report on durable goods orders in March. The Commerce Department said orders fell 4.2% last month following a downwardly-revised gain of 1.9% in February. The reading was the biggest decline in durable goods orders since January 2009 and much worse than the 1.7% decline expected by economists surveyed by Thomson Reuters . Excluding the transportation component, orders were down 1.1%.
Wall Street finished mixed on Tuesday with the Dow pushed higher by positive earnings reports and a dividend hike from IBM(IBM) . Nasdaq was tripped up by a 2% decline in Apple ahead of its report. The stock had fallen in 10 of the previous 11 sessions, losing roughly 10% along the way, with the weakness in part stemming from sell-side concerns about the iPhone.
That weakness was forgotten Wednesday morning with Apple shares gaining nearly 10% in pre-market action to easily regain the $600 level. The company's fiscal second-quarter profit soared 93% year-over-year with heavy iPhone demand leading the way.
Apple earned $12.30 a share in the March-ended period on revenue of $39.2 billion. Analysts were expecting earnings of $10.02 a share on revenue of $36.69 billion. About $22.7 billion of revenue was from sales of the iPhone. The company sold 35.1 million iPhones, 11.8 million iPads, 4 million Macs and 7.7 million iPods in the quarter.
Wednesday brings the outcome of the Federal Reserve's two-day policy meeting. A change on rates isn't expected, but the Federal Open Market Committee is expected to stick to its promise to keep interest rates at historic lows until at least late 2014. The Fed will announce its decision on rates at 12:30 p.m. EDT.