* Jobless claims drop to five-year low
* Apple shares drop nearly 11 pct after results
* China, Europe PMIs lift sentiment
* 3M boosts Dow after earnings
* Netflix jumps 40 percent after reporting profit
* S&P rose 0.4 pct, Dow up 0.6 pct, Nasdaq off 0.2 pct
By Edward Krudy
NEW YORK, Jan 24 The S&P 500 surged through
1,500 on its seventh day of gains, underpinned by positive
economic news, even as Apple shares slid nearly 11 percent
following a revenue miss.
Apple Inc missed Wall Street's revenue forecast for
a third straight quarter as iPhone sales were poorer than
expected, fanning fears its dominance of consumer electronics is
slipping. The shares dropped 10.9 percent to $457.94, wiping out
about $50 billion of its market value.
Positive economic reports helped reverse the market's
earlier declines. The number of Americans filing new claims for
unemployment benefits unexpectedly fell to a five-year low, and
factory activity in January neared a two-year high.
It was the first time the S&P 500 had risen
above 1,500 since Dec. 12, 2007.
The domestic data chimed with those overseas showing growth
in Chinese manufacturing accelerated to a two-year high this
month and a buoyant Germany took the euro zone economy a step
closer to recovery.
With signs the economy is improving, some investors are
lauding the strength of the stock market as it shrugs off a
significant slide in shares of Apple, the world's biggest
"The market has disconnected itself with Apple," said Jack
de Gan, chief investment officer at Harbor Advisory Corp in
Portsmouth, New Hampshire. "I think it shows great strength in
the overall S&P."
The Dow Jones industrial average gained 76.46 points,
or 0.55 percent, to 13,855.79. The Standard & Poor's 500 Index
rose 5.52 points, or 0.37 percent, to 1,500.33. The
Nasdaq Composite Index dropped 7.67 points, or 0.24
percent, to 3,146.00.
Apple's disappointing results drew a round of price-target
cuts from brokerages. At least 14 brokerages, including Barclays
Capital, Credit Suisse and Deutsche Bank, cut their price target
on the stock by $142 on average. Morgan Stanley removed the
stock from its 'best ideas' list.
Netflix Inc surprised Wall Street Wednesday with a
quarterly profit after the video subscription service added
nearly 4 million customers in the U.S. and abroad. Shares jumped
nearly 40 percent.
Diversified U.S. manufacturer 3M Co reported a 3.9
percent rise in profit, meeting expectations, on solid growth in
sales of its wide array of products, which range from Post-It
notes to films used in television screens. The shares shed 0.6
Corporate earnings have helped drive the recent stock market
rally. Thomson Reuters data through early Thursday showed that
of the 133 S&P 500 companies that have reported earnings, 66.9
percent have exceeded expectations, above the 65 percent average
over the past four quarters.
Investors in U.S.-based mutual funds pumped $9.32 billion
into stock funds in the week ended Jan. 16, the second
consecutive week of inflows for such funds, data from the
Investment Company Institute showed Wednesday.
Removing an element of political uncertainty from markets,
the U.S. House of Representatives on Wednesday passed a
Republican plan to allow the federal government to keep
borrowing money through mid-May, clearing it for fast enactment
after the top Senate Democrat and White House endorsed it.