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Pre-Market Primer: Apple, Blue-Chip Earnings Boost Equities Ahead of Fed Statement

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Some of America's biggest corporations blew away expectations, but the UK fell into a recession and durable goods orders dropped.

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MINYANVILLE ORIGINAL Strong earnings from major corporations pushed equity futures higher this morning, despite a disappointing report on durable goods orders.

Dow (^DJI) futures got a lift from better-than-expected earnings at a number of blue-chip companies in the past two days, rising 0.32% to 13,001.00. The blue-chip index has risen 6.42% since the beginning of the year. S&P 500 (SPY) futures rose 0.63% to 1,378.80. Nasdaq (^IXIC) futures surged 2.02% on tech company earnings to 2,685.75.

Apple (AAPL) smashed estimates once again yesterday. The company's performance in the fiscal second quarter that ended on March 31 saw earnings per share almost double to $12.30. Revenue, bolstered by the release of the new iPad and the subsequent halo effect that it had on other Apple products like Macs, rose 59% to $39.2 billion. Investors got bearish ahead of Apple's announcement after AT&T (T) reported that iPhone activations fell in the quarter. Thanks largely to growth in Asia, iPhone sales rose 88%. Apple is becoming a "China story," even if Chinese customers are selling their virginities to buy the iPhone in fake Apple Stores.

Investors sent Apple shares down 2% yesterday. After the announcement, Apple's stock has risen over 10% to $616.82.

Economic bellwether Caterpillar (CAT) also beat earnings estimates and boosted its outlook. The earth-mover company saw increases in North American sales for replacement machinery and in its mining division. Revenue rose to $16.2 billion from $12.95 billion one year ago. Earnings per share hit $2.37, up from $1.84 per share last year.

Two other Dow components beat earnings expectations since yesterday's close. 3M (MMM) announced a 4.6% increase in quarterly profit after the bell yesterday. Industrial demand for the Minnesota-based company's products helped offset slumping demand overseas. Boeing (BA), the world's largest aerospace company, saw revenue rise 30% to $19.4 billion, helped by strong demand for commercial airplanes. Earnings per share rose to $1.22, up from $0.78 last year.

Durable goods orders in the US fell short of expectations. Items intended to last at least three years dropped 4.2% in March. Economists expected a monthly decline of 1.5%. Excluding transportation, orders fell 1.1%.

European markets rallied today and Germany sold long-term bonds at a record-low yield of 2.41%. Spain's 10-year note also rallied with yields dropping as low as 5.71% today.

Britain officially entered a double-dip recession last quarter. Britain's economy contracted by 0.2% in the first quarter of last year, following a drop of 0.3% in the fourth quarter of 2011.

Oil futures advanced 0.60% to $104.17/barrel this morning on strong corporate earnings and speculation that the Fed will hint at a third round of monetary stimulus. The Federal Reserve's policy arm will make an announcement at 12:30 p.m. EDT today and Chairman Ben Bernanke will give a press conference at 2:15 p.m. The Energy Information Administration will report on last week's crude, gasoline, and distillates inventory at 10:30 a.m.

Twitter: @vincent_trivett
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