Amazon wows The Street

Shares of Amazon.com (AMZN, news, msgs) were up 12% in after-hours trading today after the online retailer astonished Wall Street saying quarterly profit more than doubled.

The company said its first-quarter results were helped by a lower tax rate and a 32% jump in net sales. The report was the latest in a string of reports from Corporate America that suggest first-quarter profits overall will prove better than expected and sets up Wednesday's market for a decent opening.

Amazon's report came after the Dow Jones industrials rose nearly 35 points to nearly 12,954. The blue-chip index neared 13,000 for the first time, topping out around 12,989 at about 2 p.m. IBM Corp. (IBM, news, msgs), Honeywell International (HON, news, msgs), Caterpillar (CAT, news, msgs) and DuPont (DD, news, msgs) provided most of the Dow's gain.

The Standard & Poor's 500 Index was down slightly to 1,480, and the Nasdaq Composite Index was up slightly to just under 2,525, despite a big gain for semiconductor stocks.

The Philadelphia Semiconductor Index ($SOX.X) jumped 3.1% to 499 today, its best percentage gain since Sept. 12, 2006, as Texas Instruments (TXN, news, msgs) jumped 7.7% to $34.92 on a relatively bullish outlook. Eighteen of the 19 stocks in the index moved higher.

Amazon.com said net profit in the first quarter was $111 million, or 26 cents per share, compared with $51 million, or 12 cents per share, a year ago. Total sales rose 32% to $3.02 billion from $2.28 billion.

Reuters said analysts had been expecting earnings of 15 cents per share on sales of $2.92 billion.

Amazon.com also boosted guidance for the second quarter and the year. It expects revenue to be $2.70 billion to $2.85 billion. Wall Street had been looking at $2.69 billion. For the year, it expects revenue at $13.4 billion to $14 billion. Analysts had been projecting $13.4 billion.

Some of Amazon's after-hours jolt may have been due to short-sellers' covering, Reuters noted. Short-sellers sell borrowed shares, hoping the stock will fall in value so they can pocket the difference as profit when they return the shares. If the stock moves up, they have to buy back the shares at higher prices. That can set off a buying frenzy.

Amazon is a stock that has attracted plenty of detractors and short-sellers over the years.

Modest gains as markets struggle

Only 14 of the 30 stocks in the Dow were higher on the day. And the Dow's gain was largely thanks to gains in those four stocks: IBM finished up 3.5% to $98.49; Honeywell was up 3.3% to $52.90; DuPont rose 1.36% to $49.86; and Caterpillar added 1.34% to $72.81.

IBM alone was worth 26 points of the Dow's gain. Honeywell added more than 13.3 points to the gain. Caterpillar provided 7.7 points and DuPont 5.4.

• Get free, real-time stock quotes on MSN Money

Former Apple exec says Jobs approved options backdating

This is how much the value of Apple (AAPL, news, msgs) shares are tied to Steve Jobs.

Shortly after 1 p.m. ET, reports came out saying that Fred Anderson, Apple's former chief financial officer, was trying to shift some of the blame of the company's options scandal back on his old boss.

The stock promptly dropped nearly $2 a share to $92.20 as investors worried whether this might threaten Jobs' tenure as Apple's CEO. The company's success in recent years is believed to be because of Jobs' championing of such products as the wildly-successful iPod music player.

The stock rebounded up to $94.40 an hour later but sagged back to $93.24 at the close. It was up slightly to $93.46 in after-hours trading.

Anderson agreed to disgorge $3.5 million in profits he personally made to settle a lawsuit with the Securities and Exchange Commission. The SEC has been investigating options backdating at hundreds of companies, including Apple. In backdating, option grants are changed so the recipient can realize greater profits.

In a statement released through his lawyer, Anderson said he told Jobs that some of the options grants Apple was making to executives would require accounting charges. More importantly, he said Jobs told him Apple's board had approved the moves.

Now, the statement said, Anderson believes that the Apple board may not have given the necessary prior approval to the grants issued in February 2001, "contrary to what Anderson understood from Mr. Jobs, and from the board."

Piper Jaffray analyst Gene Munster told Marketwatch.com that news that Anderson seemed to be pointing the finger at Jobs comes as "a surprise." While it indicates that the "PR debacle" is not over at Apple, Munster predicted that the scandal had a less than 10% chance of impacting Jobs.

The company is scheduled to report second-quarter earnings after tomorrow's close.

The revelation came as regulators also accused Nancy Heinen, Apple's former general counsel, of fraudulently backdating stock options.

Apple has said -- and repeated today -- that its review of the options backdating scandal showed no wrongdoing by current management, which includes Jobs.

The SEC said it will not pursue any further action against Apple itself, which cooperated fully with the probe.

The SEC charged Heinen with participating in the fraudulent options issued to Jobs and other executives in 2001, and with altering company records to conceal the fraud The SEC alleges the scheme caused the company to underreport its expenses by almost $40 million. Her attorneys have vowed to fight the case.

Energy prices -- New York close

	Tues.	Mon.	Chg.	Month chg.	YTD chg.
Crude oil (NYMEX) (per barrel)	$64.58	$65.89	-$1.31	-1.96%	5.78%
Heating oil (per gallon)	$1.8460	$1.8943	-$0.0483	-1.65%	15.53%
Natural gas (per million BTU)	$7.5980	$7.5620	$0.0360	-1.71%	20.62%
Unleaded gasoline (per gallon)	$2.2089	$2.1907	$0.0182	7.33%	37.88%

Existing-home sales dive

The housing market reminded the financial markets that there's still trouble in one of the economy's key sectors.

Sales of existing homes plummeted 8.4% in March from February to a seasonally adjusted annual rate of 6.12 million, the lowest level in nearly four years, according to the National Association of Realtors.

The decline from February's 6.69 million sales was the biggest one-month drop since 1989. The March sales were down 11.3% from March 2006.

The decrease was bigger than expected. Economists had expected March home sales to fall to 6.5 million.

The housing market overall is nowhere near recovery, Merrill Lynch economist David Rosenberg wrote in a note to clients. "Practically every home builder has told us that the spring selling has been a dud thus far," he said.

A report on new-home sales will come out Friday. Economists are expecting a slight pickup to 900,000 annualized from 848,000 in February.

The housing news trimmed home building stocks. The Philadelphia Housing Sector Index ($HGX.X) was down slightly at 228. D.R. Horton (DHI, news, msgs) was off 0.3% to $22.53; Pulte Homes (PHM, news, msgs) fell 0.5% to $27.82.

The inventory of homes fell 1.6% to 3.75 million, which represents a 7.3-month supply. In November, the supply reached a high of 7.4 months.

The median price of an existing home declined slightly, falling 0.3% year over year to $217,000.

Analysts were reluctant to say that the housing market was reaching a bottom.

"I have no reason to believe that this particularly is the low," Kevin Logan, a senior market economist at Dresdner Kleinwort, told Bloomberg News. "A lot of forces that drove sales higher in recent years are still weakening."

Existing-home sales are documented when they close. The cold snap that hit the country in February prevented buyers from making purchases in March.

The bursting of the housing bubble has prompted a wave of business failures in the high-risk, or subprime, mortgage sector, with even banking industry stalwarts such as HSBC (HBC, news, msgs) taking a hit as default rates have soared.

Consumer confidence takes a dip

The home sales report was one factor limiting the market's gains today.

A second factor was a decline in consumer confidence. The Conference Board's index of consumer confidence fell for the third month in a row to 104.0 in April from a revised 108.2 in March. Economists had expected the index to fall to 104.9 from a previous March reading of 107.2.

The index represents the optimism of consumers about the economy based on their savings and spending habits.

April no bull's-eye for Target

Discount retailer Target (TGT, news, msgs) said that April sales at stores open at least one year would be "much weaker" than the company's previous forecast. Wall Street promptly dropped the stock 2.1% to $60.13 and took Wal-Mart Stores (WMT, news, msgs) down 0.6% to $48.65 as well.

Target said combined same-store sales for March and April would rise between 3% and 4%, below the company's previous forecast of a 4%-to-6% gain. The company blamed the cold weather in April.

"Weather patterns, which helped boost March, may have sucked some of the sales out of April," Rochdale Investment Management analyst David Abella told Bloomberg News. "It could also be the first sign of some slowdown in retail."

Target maintained its earnings-per-share guidance of between 70 and 71 cents per share, which is below Wall Street's estimate of 72 cents per share.

Target wasn't alone in suggesting things weren't perfect.

Coach (COH, news, msgs), the upscale maker of handbags and related leather goods, was down 5.8% to $50.26 this afternoon after announcing it has shut its corporate-accounts business to help maintain its brand image.

The company cut its full-year earnings forecast to $1.67 per share from $1.71.

Chip business improving

Texas Instruments shares surged despite a company earnings report that showed a 12% decline in profit for the first quarter.The chip maker said it earned $516 million, or 35 cents per share, down from $585 million, or 36 cents per share, in last year's opening quarter.

Wall Street had expected earnings of 31 cents per share.

What pushed the shares higher was Chief Financial Officer Kevin March's saying the company's inventory glut, which began last year, had started to diminish.

The company said sales for the second quarter would be between $3.32 billion and $3.6 billion, and that earnings per share would be 39 cents to 45 cents per share, ahead of The Street's consensus estimate of 38 cents per share.

Piper Jaffray upgraded TI to "outperform" on the outlook.

• Video: Texas Instruments beats expectations

Strong earnings for DuPont

Chemical company DuPont (DD, news, msgs) reported that first-quarter net income jumped 16% to $945 million, or $1.01 per share, from $817 million, or 88 cents per share, in 2006's first quarter. Excluding items, the company earned $1.07 per share, ahead of analysts' $1.03-per-share estimate.

Strong sales of corn seed helped offset challenges due to the weaker housing and automotive industries in the U.S.

Wall Street hits AT&T shares

Telecom giant AT&T (T, news, msgs) said first-quarter profit nearly doubled, thanks in part to its acquisition of BellSouth and Cingular Wireless.

But shares fell 1.7% to $39.10 on the day because revenue and wireless growth was weaker than expected.

Net income rose to $2.85 billion, or 45 cents per share, from $1.4 billion, or 37 cents per share, in last year's opening quarter. Excluding items related to the BellSouth purchase, AT&T earned 65 cents per share, above analysts' consensus estimate of 61 cents per share.

Revenue soared 84% to $29 billion, just shy of Wall Street's expectation of $29.6 billion.

The company said it saved $300 million from the deal with BellSouth in the first quarter and added 1.2 million customers from its purchase of Cingular.

Short hits from the markets -- 4 p.m.

	Tues.	Mon.	Chg.	Month chg.	YTD chg.
Treasurys
13-week Treasury bill	4.835%	4.840%	-0.005	-1.23%	-1.02%
5-year Treasury note yield	4.512%	4.544%	-0.032	-0.55%	-4.02%
10-year Treasury note yield	4.622%	4.650%	-0.028	-0.56%	-1.87%
30-year Treasury bond yield	4.804%	4.828%	-0.024	-0.91%	-0.29%
Currencies
U.S. Dollar Index	81.36	81.55	-0.19	-1.57%	-2.48%
British pound in dollars	$2.004	$2.003	0.001	1.78%	2.26%
Dollar in British pounds	£0.499	£0.499	0.000	-1.75%	-2.21%
Euro in dollars	1.364	1.364	0.000	2.20%	3.36%
Dollar in euros	€ 0.7330	€ 0.7329	0.000	-2.15%	-3.25%
Dollar in yen	¥118.49	¥118.48	0.01	0.64%	-0.45%
Commodities
Gold	$687.70	$694.20	-$6.50	2.80%	7.79%
Copper	$3.5640	$3.6565	-$0.09	13.29%	24.14%
Silver	$13.9160	$14.0500	-$0.13	3.46%	7.58%
Crude oil (NYMEX) (per barrel)	$64.58	$65.89	-$1.31	-1.96%	5.78%

By Charley Blaine and Elizabeth Strott