MarketView for April 30

Summary

Stocks rose moderately on Tuesday, with the S&P 500 ending at another all-time closing high on a jump in Apple and encouraging economic data. The benchmark index hit a new intraday high in the last minutes of trading, following a session that was largely marked by slight moves as investors found few reasons to extend recent gains. Technology shares led the day's advance, contributing to the Nasdaq's sharp gain.

Encouraging data on home prices and consumer confidence added to the day's positive tone, though a decline in regional business activity underlined the growth concerns that remain.

Apple ended the day up 2.9 percent to close at $442.78 after coming to market with the largest non-bank bond sale in history as it seeks funding to return cash to shareholders. The tech giant has been one of the biggest drags on the S&P 500 this year, falling nearly 17 percent in 2013.

Home prices rose in February at their fastest rate in almost seven years while consumer confidence rebounded in April. However, business activity in the Midwest unexpectedly contracted in April to its lowest level since September 2009.

The S&P 500 closed out its sixth straight month of gains, its longest winning streak since September 2009, as investors used any pullback as a buying opportunity.

Equities continue to draw support from expectations that central banks will maintain low interest rates and other economic stimulus measures. A statement from the Federal Reserve due Wednesday is expected to keep in place the central bank's pace of bond buying to stimulate the economy.

For the month of April, both the Dow and the S&P 500 rose 1.8 percent while the Nasdaq gained 1.9 percent. The S&P 500 is up about 12 percent so far this year, contributing to concerns that a correction may be forthcoming.

Pfizer weighed on the Dow after the Company posted lower-than-expected quarterly earnings and revenue, and trimmed its full-year profit outlook. Pfizer's stock fell 4.5 percent to $29.07.

With 306 S&P 500 components having reported results so far, 68.6 percent have exceeded expectations, a performance not seen since the 1994 number of 63 percent, according to Thomson Reuters data. However, only 44 percent of the companies have exceeded revenue expectations, well under the long-term average of 62 percent.

Best Buy retreated from its ill-fated European expansion by selling its stake in a joint venture to Carphone Warehouse Group for less than half what it paid five years ago. Nonetheless, its shares ended the day up 7.4 percent to close at $25.99.

Shares of Symantec fell 10 percent in a span of a few seconds before trading was halted. Equity traders called the move another single-stock "flash crash," in reference to the May 2010 selloff when the Dow fall more than 600 points in a matter of minutes. Symantec fell 1.2 percent to $24.30.

Approximately 6.55 billion shares changed hands on three major equity exchanges, above the daily average so far this year of about 6.36 billion shares.

Apple Offers $17 Billion in Bonds

Apple astounded the debt markets on Tuesday with the largest non-bank bond deal in history, pricing a whopping $17 billion as the Company switches strategy to placate restless shareholders. Just a week after announcing its first drop in quarterly earnings in a decade, Apple came to market with the massive deal to raise funds for an ambitious program that will return $100 billion in cash to holders of Apple shares.

Word on the Street is that investors could barely submit orders fast enough to get in on the deal from Apple, the only major tech company without a single penny of debt on its books. The six-part all-dollar offering attracted more than $50 billion of orders by midday in New York - a massive level of demand even in the current red-hot climate of the bond markets.

The $17 billion size easily trumps the previous biggest single deal, a $14.7 billion offering from Abbott Laboratories spin-off AbbVie last November.

The word is also that this would be Apple's only bond deal of the year, apparently scuttling hopes of possible euro or sterling issues - and helping fuel demand for Tuesday's mega-deal, which was led by Deutsche Bank and Goldman Sachs.

The massive deal caps a milestone week for Apple, which in seven days has changed tack to satisfy its investor base, becoming the world's biggest dividend payer and recapturing its mantle as the world's largest company by stock market value at $413 billion.

Investors unhappy with Chief Executive Tim Cook's previous reluctance to share any of Apple's massive $145 billion cash pile with shareholders - and unimpressed by its diminishing prospects for earnings growth - had been relentless sellers of Apple's stock since its share price topped out above $705 in late September. The shares are down more than 45 percent from September 21 to April 19, falling by roughly $320 per share.

However, the stock has rallied more than 12 percent in the past 10 days as a new class of income-oriented investor, enticed by its dividend yield of nearly 3 percent, snaps up shares. They rose more than 3 percent on Tuesday to over $444.

Although the company has a staggering $145 billion in cash, only $45 billion of that is readily available in the United States - meaning Apple needs to raise about $60 billion over the next three years to fund the shareholder capital return plan. Going to the debt markets now makes sense with interest rates - and thus the cost of raising funds - near record lows.

While  Apple failed to win the highest Triple A rating from agencies. S&P rated the company AA+, while Moody's rated it Aa1, massive investor interest allowed Apple to tighten every tranche of the deal - from 3-year to a maximum 30-year tenor - by five basis points (bp) from guidance to launch.

The company sold $1 billion of three-year floating-rate notes, $1.5 billion of three-year fixed-rate notes, $2 billion of five-year floating-rate notes, $4 billion of five-year fixed-rate notes, $5.5 billion of 10-year fixed-rate notes and $3 billion of 30-year fixed-rate notes.