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Apple Earnings Help Propel US Stocks to New Record High


Today's financial recap and tomorrow's financial outlook.

US equities jumped higher thanks to a strong post-earnings rally from Apple (NASDAQ:AAPL). The tech stock was as much as 3% higher today despite earnings being worse-than-expected and lowering its guidance for the coming quarter. The S&P 500 (INDEXSP:.INX) traded in a four point range for most of the session, but managed to close at a new record high. Healthcare stocks led today thanks to a positive report from Puma Biotech (NASDAQ:PBYI) that its breast cancer drug yielded positive results, which caused the stock to quadruple.

The SEC adopted a new set of rules for money-markets funds that will allow institutional class funds to use a floating share price and impose withdrawal fees during times of stress. Funds for individual investor will continue to have a fixed share price of $1 and will not be subject to any exit fees. The new rules were adopted by a 3-2 vote.

Facebook (NYSE:FB) reported earnings after the close, beating expectations by a country mile. Earnings-per-share rose to $0.42 versus $0.32 expected and revenues of $2.91 billion versus $2.81 billion expected. Mobile ad revenues accounted for 62% of total revenues, as was expected. However, user growth continued to slow, and was not up to expectations. Mobile users only rose by 39% from the prior quarter. The stock was little changed in post-market trading immediately after the report.

Tomorrow's Financial Outlook

The most significant economic report scheduled in the US tomorrow is June new home sales. The sales, which represent contracts signed within the last month, is expected to fall to an annualized rate of 475,000 from 504,000 in the month prior. Weekly jobless claims are expected to remain near their 4-week average of 309,000. Lastly, the preliminary July manufacturing index from Markit will be released.

Overnight the Chinese private preliminary manufacturing PMI for July will be released. It is expected to show a further increase to 51.0 from 50.7 last month, the fourth straight of increases. Last month was the first time this year that the index was above 50, which signals expansion in the manufacturing survey. A similar report is scheduled to be reported in the eurozone in the morning.

Tomorrow will be the busiest day of the week for earnings report, and perhaps for the entire season with 71 major companies reporting. Notable reports include General Motors (NYSE:GM), Ford (NYSE:F), Nasdaq (NASDAQ:NDAQ), Caterpillar (NYSE:CAT), Cliffs Natural Resources (NYSE:CLF), Starbucks (NASDAQ:SBUX), (NASDAQ:AMZN), Visa (NYSE:V), Dunkin Brands (NASDAQ:DNKN), and Bristol-Myers (NYSE:BMY).

Twitter: @Minyanville

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No positions in stocks mentioned.

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