Apple shares see-sawed in after-market trading after the US technology company caved to growing pressure from investors and said it would boost its share buyback programme by $55bn.
The announcement released along with better than expected quarterly sales and profits from the company initially helped spark a rally of as much as 5.5 per cent in its shares. But investors quickly soured Apple’s forecasts for its next quarter, with leaving its shares alternating between gains and losses in thin post-market trading late on Tuesday.
Heading into the day, the company had seen its market valuation fall by a quarter this year as investors were concerned that the company’s rapid rate of growth was slowing and pressed it to consider greater capital returns from its large cash pile.
Apple was flat at $406.50 in the late after-market trade, after having risen nearly 2 per cent during the day’s trade.
The company’s results capped an unusual day on Wall Street, where stocks experienced a momentary sell-off in the early afternoon after a false news headline on Twitter from the Associated Press reported two explosions at the White House. The false report caused the S&P 500 to give away nearly all its gains for the day, before the market quickly recovered those losses.
Overall, the S&P 500 rose 1 per cent to 1,578.78 in New York. All 10 major industry groups on the benchmark traded strongly higher on the day.
Strong corporate earnings results helped bolster shares and signs of weakness from the eurozone suggested that policymakers may intervene to stimulate the continent's flagging economies. Meanwhile, a measure of Wall Street’s fear also fell as investors sold off positions that would provide protection against a decline in stocks.
Financial shares were among the strongest on the day and rose 1.8 per cent. Travelers Companies gained 2.1 per cent to $86.35 after the insurance group said it would boost its quarterly dividend after reporting strong first-quarter results. The company said it was able to charge customers higher premiums and that catastrophe losses lessened in the period.
The Dow Jones Industrial Average climbed 1.1 per cent to 14,719.46. The Nasdaq Composite index gained 1.1 per cent to 3,269.3.
The gains across Wall Street came despite the latest surveys of global manufacturing, which showed that the sector’s expansion last month came at a slower rate than forecast.
The data added to speculation that the global economy has slowed in recent weeks, but also led some investors to believe that the European Central Bank may take actions to stimulate eurozone economies.
Those expectations helped lift shares in some of Wall Street’s largest banks, which just last week blamed deteriorating conditions in the eurozone for some of their sluggish performance. Bank of America climbed 3.1 per cent to $12.08, Morgan Stanley rose 4.3 per cent to $21.61 and Citigroup added 2.9 per cent to $46.47.
A batch of fresh housing data released on Tuesday showed that new home sales continued to rise in the US last month, but at a slightly slower pace than expected. Housebuilder PulteGroup gained 6 per cent to $19.40 and DR Horton moved 5.3 per cent to $23.56 as the data also showed that house prices continued to rise.
The S&P 500 information technology index gained 1.2 per cent after strong results on Monday from Netflix. The internet media streaming and home DVD delivery company soared 24.5 per cent to $217.50 after it said this week it was adding new subscribers and expanding its business at a much faster pace than expected.
Chemical group Dupont rose 4.2 per cent to $52.50 after it said net profits more than doubled in its latest quarter as US farmers sought products to protect against future droughts.
Shares in Lockheed Martin rose 1.3 per cent to $97.05 even as the defence contractor said it had lowered its full-year sales forecasts due to ongoing cuts to the US military budget. Another defence manufacturer United Technologies lost 0.8 per cent to $92.89 after reporting that parts of its business had been hurt by the budget cuts.
Coach jumped 9.8 per cent to $55.55 after the fashion group beat earnings expectations for its most recent quarter and raised its annual dividend.
Delta rose 10.4 per cent to $16.72 as the airline beat first-quarter profit forecasts after having said demand in March had slowed.