Stocks Closed Mixed Yesterday, Apple Reported Record Earnings After The Close
Stocks closed mixed yesterday, but erased most, and in some cases all, or more, of their intraday losses.
After a relatively flat opening yesterday, stocks quickly sank, hitting their worst levels mid-morning. But then began their rebound, with most indexes finishing near where they started. The Nasdaq, for example, was down as much as -2.62% intraday, before closing lower by 'only' -0.72%. The S&P was down as much as -1.54%, before closing lower by just -0.13%. The Dow, which was down as much as -0.85%, finished up 0.11%.
Microsoft weighed on the markets yesterday, dropping by roughly -10% on the day. While they posted double-digit sales and earnings the day before, concerns over slowing cloud growth and rising CapEx spooked investors.
Tesla also weighed on the market, dropping by roughly -3.5% on the day, following their earnings, where both top and bottom lines were in the red. Although, in spite of yesterday's decline, investors seem more interested in the future story of Tesla, which includes robotaxis, AI, data centers, and their Optimus humanoid robots.
On a separate note, late on Thursday it was reported that Elon Musk was considering merging his SpaceX and xAI companies. You'll recall, Mr. Musk has said he wants to launch data centers into space to support AI workloads. Tesla was up roughly 3% in after-hours on the news. While those companies are not part of Tesla, they are all controlled by Elon Musk. And the synergy they could create, along with potential resource allocation, could prove beneficial. We'll see what all this means. But as mentioned earlier, investors are interested in the future story of Tesla. And all of his companies could provide added value in many ways to Tesla.
Meta soared by more than 10% yesterday, following their earnings, where they posted double-digit top and bottom lines, and raised their revenue guidance.
After the close yesterday, we heard from Apple, another Magnificent 7 stock. They posted a positive EPS surprise of 7.17%, and a positive sales surprise of 4.32%. That translated to a quarterly EPS growth rate of 18.3% vs. this time last year, and a sales growth of 15.7%. Apple touted a record-breaking quarter, with their highest-ever iPhone revenue and highest-ever services revenue. Apple CEO, Tim Cook, said "iPhone had its best-ever quarter driven by unprecedented demand, with all-time records across every geographic segment," and called the demand "simply staggering." They were up 0.72% in the regular session before earnings, and were up more than 2% in after-hours trade following earnings.
Today we'll hear from another 77 companies, including Exxon Mobil, American Express and Regeneron Pharmaceuticals, to name a few.
In other news, it was reported on Thursday evening that the Senate came together to avert a government shutdown. It includes passing all of the remaining funding bills, and agreeing to a 2-week continuing resolution (CR), on the Homeland Security bill, to give lawmakers more time to reach a longer-term agreement, without shutting the government down.
They still have to vote on it. But the CR would likely have to go back to the House. And if there are any changes to any of the other bills, those too would have to go back.
But for now, it looks like a government shutdown might very well be averted. But nothing is done until it's done. They have until the end of today (1/30), to see it happen.
In the meantime, the S&P and Nasdaq are poised for a higher weekly close. If all goes well today, we'll get it.
Best,
Kevin Matras
Executive Vice President, Zacks Investment Research | 
