Wall St pops on Apple's results, Fed's reassurance
By Caroline Valetkevitch
NEW YORK (Reuters) - U.S. stocks rallied on Wednesday, with Apple's surge giving the Nasdaq its biggest gain of the year, while the Fed chairman reassured markets that the central bank would do more if necessary to lift the economy.
Apple Inc fueled optimism that the current earnings season would be much stronger than expected, generating gains across all market sectors. The iPad and iPhone maker's results, released after Tuesday's closing bell, showed that its quarterly profits nearly doubled, while its revenue easily topped expectations. The rally in Apple's stock especially benefited the S&P 500 tech sector index, which jumped 3.2 percent.
Federal Reserve Chairman Ben Bernanke spurred further gains when he said the U.S. central bank "would not hesitate" to launch another round of bond purchases to drive borrowing costs lower if it looked like the economy needed it.
Shares of Apple, which has the world's biggest market capitalization, jumped 8.9 percent to end at $610. The stock scored its best daily gain in a little more than three years and Wednesday's rally added $46.3 billion to Apple's market cap. Earlier, Apple surged 10.3 percent to a session high at $618.
At Wednesday's close, Apple accounted for 5.05 points -or 27 percent - of the S&P 500's gain for the day of 18.72 points, said Howard Silverblatt, senior analyst at Standard & Poor's.
Apple's results boosted S&P 500 companies' earnings growth to an estimated 6.9 percent for the first quarter, up from an estimate of 4.6 percent before Apple, according to Thomson Reuters data.
Apple's stock had sold off recently, partly on fears that its earnings could disappoint.
"It was a big relief" to many investors, said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois, referring to Apple's results. "There were a lot of worries going into that earnings report. I think people were worried iPhone growth was going to slow, and it was the same thing with iPad growth. Continued...