Apple, Boeing profits drive US stocks

NEW YORK: Blockbuster profits from Apple and a solid showing by Boeing pumped up US markets on Wednesday, with a late boost coming from a slightly improved growth outlook from the Federal Reserve.

Apple's shock profits report - net income in nearly doubled from a year ago to US$11.6 billion - gave its stock an 8.9 percent boost to drive the Nasdaq market up for a 2.3 percent gain.

The tech-heavy index finished 68.03 points higher at 3,029.63.

The Dow Jones Industrial Average of blue chips gained 89.16 points (0.69 percent) to 13,090.72, thanks to Boeing's strong earnings.

The broad-based SandP 500, which includes both Apple and Boeing, gained 18.72 (1.36 percent) to 1,390.69.

Corporate earnings drove trade, with the indices leaping immediately on opening and for the most part holding their gains throughout the session.

There was some selling when the Federal Reserve refrained from any moves to further stimulate economic growth after a policy review.

But bulls moved back in after the Fed released a new growth forecast for the year which was slightly rosier than before: it foresees expansion of 2.4-2.9 percent, without any serious inflation pressure.

"As expected, the Fed's perception of the economic activity improved slightly, but overall the statement remains cautious," said Inna Mufteeva of Natixis.

But mostly it was the that pushed stocks higher.

After the close of trade Tuesday Apple said it had earned a profit of US$11.6 billion on revenue of US$39.2 billion in the quarter ended March 31. Sales of iPads more than doubled and iPhone sales surged 88 percent.

"Apple stock is now so significant that traders look at it as almost a separate index, a leading indicator for the stock market as a whole," said Dick Green at Briefing.com.

Boeing shares surged 5.3 percent after the aircraft maker said earnings expanded a strong 58 percent in the first quarter.

But Caterpillar, another bellwether of the economy, saw its shares slip 4.6 percent despite better-than-forecast profits. Investors were disappointed that the company missed revenue forecasts, despite a 25 percent rise.

Dow Chemical gained 4.2 percent after announcing a dividend increase, while oil company Hess sank 7.0 percent after reporting poor progress in boosting production in its North Dakota fields. -- AFP