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Stocks move lower after mixed earnings results

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Stocks move lower after mixed earnings results

US stocks moved lower on Wednesday as market participants continue to absorb a plethora of earnings data.  On Wednesday both Boeing (NYSE:BA) and Caterpillar (NYSE:CAT) released earnings that showed a divergence.  Mining activity and new exploration hurt Caterpillar while better than expected consumer demand buoyed Boeings earnings.  After the bell, on Tuesday, Apple Inc. (NASDAQ:AAPL) , the technology giant, released better than expected top and bottom line.

Apple’s third quarter 2013 results were released after the close of trading Tuesday. Revenues of $35.32 billion and EPS of $7.47 beat consensus estimates by $300 million, and 15 cents, respectively. Forth 2013 revenue guidance came in at $34-$37 billion, below a $37.1 billion consensus. Apple’s sales of iPhones which is a benchmark for earnings beat estimates while iPad sales came in slightly worse than expected. Total iPhone sales grew by 20% to 31.2 million units; with iPhone revenue growing by 15% year over year, this suggests a shift to lower-priced iPhones.

After the closing bell, Facebook (NASDAQ:FB) reported better than expected earning which drove the stock higher and allowed it to recapture the 30 level for the first time since its IPO.  The stock should help drive the Nasdaq higher on Thursday.

The Nasdaq 100 was the best performing of the major indexes, but is coming under pressure despite the bounce in Apple.  Momentum is turning as the MACD (moving average convergence divergence index) is poised to generate a sell signal.  This occurs when the spread (black line – 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread – red line).  The RSI (relative strength index) has come off overbought levels and is now printing near 57 which is in the middle of the neutral range.

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