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The Dow Jones rose 0.45% Wednesday, closing at 22,014.51, crossing 22,000 for the first time in history, Reuters reports. It dropped slightly in after hours trading, but as of 11 am Thursday, it has gained another 0.06%, bringing it to 22,029.11.
The Dow’s rise is in large part due to the success of tech giant Apple, which announced its earnings for the third quarter of its fiscal year (ended July 1) Tuesday. The company exceeded analysts’ expectations with 7% year-over-year revenue growth and a 17% year-over-year rise in earnings per share. iPhone sales rose 2% year over year and generated 3% more revenue than they did a year ago. The company’s services-based revenue hit a record quarterly high of $7.2 billion, a 3% increase from last quarter and a 22% jump year-over-year.
Apple stock spiked almost 7% on the news in after-hours trading Tuesday, closing at $149.33/share Tuesday afternoon and opening at $159.51 Wednesday morning. Since Wednesday, the stock has dropped 2.1% as of 11:30 am Eastern Thursday. It is priced at $156.15/share.
Some investors would like to see Apple spend more money to improve its own business operations.
“Apple, at the heart of it, has a lot of consumer exposure, and the consumer is in great shape. But we would like to see some capex [capital expenditure]“ said Mike Baele, managing director at U.S. Bank Private Client Wealth Management in Portland, Oregon, per Reuters.
The Dow has risen 11% this year. It cracked 20,000 in late June and exceeded 21,000 on March 1, per Reuters.
The S&P 500 and the Nasdaq, which have seen success of their own this year—the Nasdaq composite has gained 16.9% since January 3; the S&P 500 is up 9.5% since the same date—saw little change. The former increased by 0.5%, while the latter remained flat.
The Nasdaq and the S&P 500 were hit by the losses of some heavy hitters in the tech sector: Microsoft fell 0.44% Wednesday; Facebook lost 0.33%.
Facebook and Microsoft are both performing well in 2017. The social media heavyweight has risen 46.8% since December 30, and the software giant is up 15.9% since the same date. Both have helped to make technology the leading S&P sector. The S&P’s information tech index has jumped 23% in 2017.
AutoNation, which belongs to Nasdaq as well as the S&P 500, has fallen 6% since releasing its quarter two earnings report, which revealed a 3% drop in year-over-year revenue, and a 1.9% fall in gross profit.
Cardinal Health, which, like AutoNation, is a member of both Nasdaq and S&P, has dropped 11.14% on its most recent earnings report. Though the company’s revenue increased 5% year-over-year, net earnings fell 18%, and earnings per share dropped 16%.
Still, of the 2/3 of S&P companies who have reported their second quarter earnings, 72% have beaten Wall Street expectations, Reuters says. On average, about 64% of companies per quarter “beat the street.”
The economy’s success, Reuters points out, comes despite gridlock in Washington, which is stalling the Trump Administration’s efforts to cut taxes and boost infrastructure spending. Many investors say the political situation has but secondary bearing on the market’s performance.
“The Trump agenda getting done or not is not the difference between positive or negative GDP,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company in Milwaukee, Wisconsin, per Reuters. “I continue to believe the Trump potential tax changes are the icing on the cake of an already improving economy.”
The economy is indeed improving. GDP growth is bouncing back after a sluggish 2016, and company performance has been strong in the most recent quarter. The dips of Facebook and Microsoft seem to be but road bumps in a successful market.