Apple reports record iPhone sales; Yahoo will do a tax free spin off of its Alibaba stake; Stocks drop on multinational earnings. Bobbi Rebell reports.
Apple had a great quarter selling a record 74.5 million iPhones during the holiday season. Revenue jumped close to 30 percent, far better than forecasts. Shares rose in after hours, though the firm did say foreign exchange is becoming a clear headwind. Big after hours news sending Yahoo stock higher. The company is planning a tax-free spin off its 15 percent stake in China's Alibaba. The stock will be distributed to Yahoo shareholders. Yahoo earnings came in slightly better than expectations. AT&T earnings also out after the bell, coming in just ahead of forecasts. Weak earnings slammed stocks. The Dow at one point had plunged close to 400 points before cutting its losses. The strong dollar hurt earnings of blue chip companies and other multinationals. Ross Gerber is CEO of Gerber Kawasaki Wealth and Investment Management: SOUNDBITE: ROSS GERBER, PRESIDENT AND CEO, GERBER KAWASAKI WEALTH AND INVESTMENT MANAGEMENT (ENGLISH) SAYING: "Clearly, multi-international companies are feeling the weight of the strong dollar, the weakening European economies, and also the economy of China not doing as well. So, we're seeing a pullback based on these factors, and so, these big companies are really going to have to make this transition to a lower growth environment in the rest of the world and probably a stronger growth environment in the United States." Among those suffering from currency translations: Dow stocks P&G, 3M and DuPont. Procter & Gamble's profit tumbled 31 percent in the latest quarter. The household goods maker said profits would have risen were it not for the strong dollar. 3M also blamed the currency for its weaker-than-expected rise in revenue, while DuPont warned that the mightier greenback would hurt its full-year profit. Microsoft shares were the biggest loser on the S&P 500. The world's largest software company also got stung by the dollar. But sluggish PC sales also hurt the company by dampening demand for its Windows operating system software. Dollar aside, oil was the culprit for Caterpillar. The construction equipment maker cut its earnings outlook and its profit forecast for this year and warned the collapse in crude prices would dent its energy equipment business. Consumer confidence rose to its highest level in more than seven years this month. But investors were more swayed by the surprising drop in core orders for durable goods last month because that signals weaker business spending plans. In Europe, the eight-session win streak for stocks came to an end on weak earnings, as well as renewed concerns about Greece.