Investors experienced the “Bizzaro World” stock market today. Apple led the Dow down, while GE was the top performer – our Facebook page issued a Public Service Announcement just in case pigs were flying. The Dow finished down 202 points for the day, but was still up 102 points for the week.
Apple shed 7 bucks (-4.10%) after news hit that Morgan Stanley predicted disappointing iPhone sales in quarter 2. While it is expected that estimates on phone sales will be lowered during the upcoming earnings call, analysts are not really worried about it because of the technology coming down the pipeline, including potentially 3 new phones and their 7nm processor. Smart phone demand as a whole seems to be down, as chipmakers are reporting lower revenue estimates and higher surpluses for Q2.
GE reported better than expected earnings, and boy was it needed. With the possibility of more bad press amidst the Southwest Airlines accident, the good earnings report not only kept the stock from tumbling even further, but it allowed it to be the Dow’s big gainer for the day, increasing by almost 4%. First quarter revenue was up 7 percent, adjusted earnings were at 16 cents a share which was higher than the 11 cents a share analysts were expecting, and industrial structural costs were down $805 million. Reports are also coming out that GE is trying to sell its rail business to Wabtec.
Wells Fargo agreed to pay $1B in fines as a result of the abuses in their auto insurance and home loan businesses. As mentioned last week, Wells restated their earnings, taking $800 million out of first quarter profits thereby lowering it by about 20%. In true “Bizzaro World” fashion, the stock was up 2% today.