Apple Beats Expectations and Obama Backs New Sales Tax: Market Recap

While stocks plunged briefly on a fake tweet from the Associated Press — which claimed that an explosion had rattled the White House and injured President Obama — all three major indexes ended the day in the green, buoyed up by strong earnings and the release of positive new home sales figures for March.

At the close:

DJIA:+1.05% to 14,719.46 S&P 500:+1.04% to 1,578.78 NASDAQ:+1.11% to 3,269.33
Gold: -$6.40 to $1,414.60 per ounce Oil: +0.27% to $89.43 per barrel U.S. 10-Year: +0.014 points to 1.707%

The Federal Reserve’s beige book report on current economic conditions, released at the end of last week, noted that retail sales may be poised to make a comeback. The Central Bank stated that “looking ahead, retailers in several Districts expect modest sales growth in the near term.” However, Tuesday’s snapshot of the retail sector — provided by the International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index and Redbook — did not provide much evidence of that prediction…(Read more.)

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Battle lines have been drawn between brick-and-mortar retailers and their online competitors. On Monday, 74 senators voted to limit debate on a measure that would allow U.S. states to require out-of-state retailers to collect online sales tax, and could hold a vote as early as Wednesday. Significantly, the White House publicly backed the measure. Obama may be interested in supporting the measure because it broadens the tax base at a time when many states are strapped for cash… (Read more.)

The debate over firearms has ignited a wave of emotions and political rhetoric over the past several months, but investors in gun-related stocks appear to have steady hands. Earlier this year, President Barack Obama and Vice President Joe Biden rolled out a wide-ranging list of executive actions regarding gun control. Obama also called on Congress to expand background checks on all gun sales, ban military-style assault weapons, and ban capacities of more than 10 rounds. After months of discussions and finger pointing, Congress did not answer Obama’s call. A bill aimed at expanding the system of background checks failed in the Senate last week. It received only 54 votes, six votes short of the 60 needed to advance… (Read more.)

Here’s your Cheat Sheet to today’s top stock stories:

Apple (NASDAQ:AAPL) reported first-quarter results at 2 p.m. Pacific Time on Tuesday that were slightly better than analysts had predicted. Breaking down the results in simple terms, the iPhone maker posted earnings per share of $10.09 on a revenue of $43.6 billion, compared to earnings per share of $12.30 on a revenue of $39.2 billion reported in the year-ago quarter. While earnings per share declined on a year-over-year basis, the company’s first quarter financials beat top-line and bottom line expectations. The average estimate held by analysts called for Apple to report adjusted earnings of $10 share on revenue of $42.4 billion.

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Despite gains in these two important business — smartphones and wireless data, AT&T’s (NYSE:T) revenue fell short of expectations. Coming in at $31.4 billion, revenue was down 1.5 percent compared with the first quarter last year and slightly short of the consensus estimate. On an adjusted basis, the company reported earnings of 64 cents per share, which represented an 8.5 percent increase from the year-ago period. These results were in line with expectations. In after-hours trading, shares fell as much as 2.44 percent to $38.05 after earnings were released.

The annual proxy statement filed with the Securities and Exchange Commission Monday gave an interesting view into how Wal-Mart (NYSE:WMT) conducted its investigation into bribery allegations last year. The retailer stated that it had paid the members of its board’s audit committee more in 2012 than in the previous year because of the extra work created by the foreign bribery probe.

After years of woes — including eroding market share, decreasing profit margins, and the downgrade of its corporate bonds to junk status in 2005 — Ford (NYSE:F) may be finally standing at the beginning of a new chapter in its history. With analysts predicting that the second largest U.S. automaker will post its highest first quarter North American profit ever, the company’s comeback appears to be gaining momentum.

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Netflix (NASDAQ:NFLX) soared as much as 24 percent on Tuesday after the video-streaming subscription service reported first-quarter results that blew the socks of investors and analysts alike. To put it lightly, the stock has been on a tear over the past 52-week period. Including Tuesday’s gains, shares are up more than 111 percent year over year. The stock is finally closing back in on all-time highs hit in July of 2011. But it’s not all sunshine and happiness at the company. Michael Pachter, an analyst at Wedbush Securities with an Underperform rating on the stock, suggests that as many as 10 million people are using the service without paying. This, of course, is bad for business

Federally insured financial institutions that relied on ratings assigned by McGraw-Hill’s (NYSE:MHP) Standard & Poor’s suffered huge losses during the financial crisis, and during its aftermath, the Justice Department has attempted to prove that the company’s mortgage-backed securities ratings were fraudulent. Now, S&P — the largest rating company in the United States — must file its response to the claims in federal court in by Tuesday, which will be the rating firm’s first attempt at fighting off the Justice Department’s allegations.

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