The broad-based S&P 500 was treated to positive news early this morning, when weekly jobless claims figures pointed to a slight drop in week-over-week claims, to 366,000. Even with the previous week’s rise, this would signal a moderately growing labor market.
This was, unfortunately, not enough to save the markets from a mid-day shellacking, which was brought upon by weak earnings from the technology sector. In fact, you’d struggle to find a tech winner anywhere near the best performers of the day within the S&P 500. A revenue shortfall from Akamai Technologies, Inc. (NASDAQ:AKAM), a content-delivery management company, sent the tech sector into a tizzy. Akamai, which should be seeing big benefits from an increase in web traffic and data transfers, forecast revenue of $352 million to $362 million in the first quarter, which underwhelmed analysts looking for $370 million. Akamai wasn’t alone, either, as Teredata, LSI Corp (NASDAQ:LSI), Micron Technology, Inc. (NASDAQ:MU), and F5 Networks, Inc. (NASDAQ:FFIV) were all among the worst performers.
Tech earnings may have failed to impress, but other sectors, and a field of not-so-common names, did their best to fill the gap.
Auto parts retailer O’Reilly Automotive Inc (NASDAQ:ORLY) was a standout, after reporting better-than-expected fourth-quarter results, and boosting its 2013 forecast. On the heels of 4.2% same-store sales growth, O’Reilly reported a 7% increase in sales, and an 8% increase in profits, as gross margin expanded 50 basis points. Looking ahead, O’Reilly is forecasting same-store sales growth of 3%-5% in 2013, with EPS of $5.57-$5.67, well ahead of the $5.44 that Wall Street expected. Considering that new car sales growth is expected to slow in 2013, this could play perfectly into the hands of auto parts retailers and consumers looking to extend the life of their current automobiles. Shares advanced 8% on the day.
Shareholders of for-profit educator Apollo Group Inc (NASDAQ:APOL) had reason to celebrate, with shares rising just shy of 3% on the day. The reason was a much-better-than-expected report from peer DeVry Inc. (NYSE:DV) , which sent its shares up 16.4%. Even though DeVry’s revenue fell nearly 4%, EPS came in at $0.87, trouncing the $0.59 expected by Wall Street, signaling that the company’s move into international markets is paying off. Investors hope that Apollo will soon be sharing in that same success with campuses located in Central and South America. However, consider me much less enthusiastic about Apollo’s chances, as I’m keeping a healthy distance from this sector.