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We got monster earnings from Apple.  We also got introduced to the Fed’s new communications policy.First, the scoreboard:

Dow: 12,758.9, +83.1, +0.7%
S&P 500: 1,326.1, +11.4, +0.9%
NASDAQ: 2,818.3, +31.7, +1.1%

And now, the top stories:

  • There was some volatility in the financial markets earlier today.  Addressing the Greek debt situation, IMF head Christine Lagarde suggested that the public sector should be willing to absorb losses if negotiations on a private sector debt swap fails. Is This A New Watershed Moment In The Euro Crisis?
  • December pending home sales fell 3.5%, which was much worse than the 1.0% decline expected by economists. “Contract failures remain an issue,” said NAR chief economist Lawrence Yun.  Here Are 10 States Where You Can Get Amazing Bargains On Foreclosed Homes >
  • The Federal Open Market Committee (FOMC) announced no change in its Fed Funds target rate.  It went on to say that it expects to hold rates “exceptionally low” through 2014.  In its new effort to be more transparent, the Fed published a series of charts reflecting the mix of opinions among FOMC members.  We learned that two FOMC members don’t expect to raise rates until 2016.
  • Following the FOMC’s announcements, stocks turned positive, gold surged, and the dollar fell.
  • Lots of companies moved on earnings today.  But no announcement was as big as Apple’s. The company reported EPS of $13.87 on revenue of $46.33 billion.  Numbers blew out analysts’ expectations of $10.07 and $38.76 billion, respectively.  During the quarter, Apple sold 15.4 million iPads, 37.0 million iPhones, 5.2 Macs, and 15.4 million iPods.  Sales for all four product categories were better than expected.  “Apple is breaking the law of large numbers,” said the WSJ’s Rolfe Winkler.  The stock jumped 6.2%.
  • U.S. Airways and Delta Airlines both both announced better-than-expected earnings, sending shares up 17% and 6%, respectively.  Amid speculation that it was considering a bid for bankrupt American Airlines, U.S. Airways’ CEO Douglas Parker faced the rumour head-on during the company’s earnings conference call.  Parker confirmed that the company had hired Barclays Capital and Millstein & Co. to look into the matter.  “So while it’s no longer imperitive that our industry consolidate, we are of course always interested in exploring value enhancing deals,” Parker said on the call.  The Next 17 Big Companies That Are At Risk Of Bankruptcy >
  • Last night, Roche made a $5.7 billion bid for biotech company Illumina, which sent shares soaring by more than 40%.  However, UBS analyst Daniel Arias thinks Illumina is worth much more.
  • Don’t Miss: Legendary Credit Guru Edward Altman Unveils His 2012 Outlook For Corporate And Sovereign Defaults >