The Nasdaq received a boost pre-market as both Apple ($AAPL) and Facebook ($FB) reported better than expected earnings on Wednesday after the closing bell. While many focused on Facebook and its ability to enhance earnings will mobile revenues, Apple surprised the street will better than expected results along with a buy back and 7:1 stock split. The Nasdaq will likely be the leader in today’s trade, which could see the large cap tech index recapture the 50-day moving average.
Facebook added to the technology exuberance in the tech sector with Q1 results that comfortably beat expectations. Profit almost tripled on year to $642 million, EPS was $0.34 and revenue soared 71.2% to $2.5B. Once again, earnings were driven by mobile ad sales, which rose 19% on quarter. Expectations were for earnings of 0.24 cents per share.
Apple reported that net income grew 7% to $10.2 billion, on earnings per share of $11.62 and revenues rose 4.7% to $45.6 billion. Result were driven by much better than expected revenues from iPhones in the quarter, coming in at 43.7 million units versus expectations that ranged as low as 36.5 million units. Apple’s Q3 guidance shows that the Q3 will not be quite as robust as Q2. The company is guiding to $36 to $38 billion in revenues; margins of 37% to 38%; expenses of $4.4 to $4.5 billion; and a tax rate of 26.1%.
The $NDX is poised to gap open higher, and test the 50-day moving average. Momentum on the Nasdaq 100 is strong, as the MACD (moving average convergence divergence) index generated a buy signal. This occurs when the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day proprietary trading moving average of the spread.