Today's closing bell brings both good news and bad news for the stock market. The good news is that today wasn't as bad as yesterday. The major indexes fell once again, but at least the Dow didn't suffer another day of triple-digit losses. Traders reacted to a flurry of earnings reports, most of which brought good news on the surface, but some of which hinted at underlying worries.
Morgan Stanley (MS) topped estimates this morning with its earnings report, but the stock tanked anyway moving more than 5% lower. The bank posted profits of 61-cents a share excluding items. Analysts had expected 57-cents. Revenue also topped expectations at $8.475 billion up from $6.94 billion in the same period a year ago, when the company posted a 6-cent loss. Morgan Stanley cited strong performance in its global wealth management group, but the bank continues to see business erode in fixed income and commodities trading, which may have caused the stock's move lower.
Shares of Verizon (VZ) rose nearly 3% on its earnings report, which was also released ahead of the opening bell. The company posted better-than-expected profits which were boosted by the performance of its wireless business, which cut costs without sacrificing growth. Earnings rose to $1.95 billion, or 68 cents a share. Analysts had been looking for earnings of 66 cents a share. Interestingly, Verizon says the iPhone still accounts for the majority of its smartphone sales. In fact its sales of the Apple (AAPL) devices rose 25%.
As for Apple, it sunk below $400, closing down another 2.7%. Today's loss followed more than a 5% fall yesterday. That plunge was precipitated by word from Apple suppliers that orders have been down, though they didn't explicitly cite Apple as the source of the drop in business. Remember, Apple was trading at $705 back in September. It's now at less than 60% of that, and has shed well over 20% of its price since the start of the year.
Traders spent the day bidding down the price of eBay (EBAY). Shares fell nearly 6% after the company reported earnings after yesterday's closing bell. eBay posted profits of 63-cents per share. That's a 19%jump over last year. Revenues were also up 14%, just missing expectations. But eBay is warning that sales growth has slowed from last year, and the company is lowering its outlook moving forward. In addition, its PayPal unit is also facing increased competition from Amazon and other competitors. Prior to today's fall eBay was up almost 60% over the past year. It hit a 52-week high last week.