Market Insights

It hasn’t been a perfect week for earnings, but the big names came through.

First and foremost, Apple (AAPL) shot to a new all-time high above $200. Not only did did the tech giant beat estimates, details of the income statement revealed a company that’s evolving in a way that could ensure years of sustainable earnings growth. CEO Tim Cook successfully defended the price of iPhones and is growing the company’s services business, which typically has stabler revenues than devices. AAPL’s also buying back shares and gaining traction in the wearables segment… just in time for the next iPhone launch (likely in September).

If AAPL got an “A” for earnings, the other 800 billion-pound elephant in the room, Amazon.com (AMZN), probably received something more like a “B-.” The main reason was a top-line revenue miss. However Jeff Bezos’ e-commerce giant managed to beat profit estimates thanks to fat margins. The reasons for that included outperformance at its AWS cloud business and the launch of advertising on its web site. (Don’t forget Amazon.com is the world’s No. 8 online destination, according to Alexa.)

Semiconductor-equipment companies were also a strong area in tech, led by KLA-Tencor (KLAC) and Lam Research (LRCX). Both beat estimates.

Tesla Motors (TSLA) was another major Nasdaq company to shoot upward on its results. Its financials were a bit more mixed, with profit missing. CEO Elon Musk apologized for past bad behavior and promised a better second half. That helped build confidence that the company will thrive in the long-run. Short sellers who bet against the the name got smoked.

But then there’s Twitter (TWTR). Following the ominous cue of Facebook (FB), the smaller social-media company got slammed on weak user traffic and spiraling costs. Video-game makers also fell after Electronic Arts (EA) issued weak revenue guidance.

If famed tech entrepreneur Jack Dorsey took a hit on TWTR, he made up for its with his other company: Square (SQ). The electronic-payments company managed to beat estimates, but investors mostly cheered its continued growth in transaction volumes..

Outside of technology, energy giant Exxon Mobil (XOM) dropped after refinery-maintenance costs weighed on earnings.

Caterpillar (CAT), closely watched because of its exposure to Chinese trade squabbles, surprised to the upside but has done little more than remain trapped in a range since.

Pfizer (PFE), another member of the Dow Jones Industrial Average along with CAT, ripped to a new multiyear high after inching past estimates. Analysts, however, cheered growth for some of its key drugs and see the potential for strategic actions like business divestitures.

There were troubles in hotel and gaming stocks — especially MGM Resorts (MGM) and Wynn Resorts (WYNN). MGM was squeezed by pricing pressures in Las Vegas and WYNN’s Chinese business in Macau grew less than hoped.

Materials stocks got hit as well. Chemicals giant DowDuPont (DWDP) warned investors about a squeeze from higher commodity costs. U.S. Steel (X) fell after margin pressures caused management to issue mediocre guidance. A.K. Steel (AKS) also took a beating.

In conclusion: The last week of earnings had some bad surprises. But the most important companies in tech came through and kept the market steady.