Apple put the shine back on the ball Monday after it reported record earnings that almost doubled analysists predictions. The sales of I-phones in China propelled the earnings up more than 90% for the quarter.
The largest company in the world continues to surprise even its greatest skeptics. The stock briefly touched $618 before selling off in the last hour or so to close up almost $50 dollars at $610 a share up more than 9%.
The weight of Apple in the Nasdaq-100 (NDX) gave the index its biggest gain in 2012 driving it up more than 2.7 %. The S&P and DJIA also enjoyed gains and closed up more than 1.4%.
Stocks also rallied as results of the FOMC meeting were released. The twelve district presidents said that they expect growth to gradually accelerate. In addition they stated that borrowing costs most likely will remain “exceptionally low” for at least the next two years.
In a separate statement Ben Bernanke said that the Central Bank will do whatever is needed to keep the wheels of the economy turning. Does this mean a QE III is on the way? He certainly did not discount it.
Many analysists read between the lines and when the markets are going higher there is a strong incentive to keep the taps open. The recovery from the great recession is not over and any rise of interest rates could spark a downturn. In effect the Fed is acting as an insurance policy.
Earnings figures this quarter are now appearing stronger than many expected. This increase in earnings helps to keep P/E ratios going lower which is almost always viewed as being bullish.
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