Weak Google earnings drag Wall St lower
US stocks fell yesterday, with technology stocks hit hard after Google’s surprisingly weak earnings – released prematurely during the trading day – disappointed investors.
Shares of Google lost 8 per cent – the stock’s worst day since 20 January – to close at $695 after the Internet giant’s third-quarter results showed earnings and revenue fell short of forecasts. The earnings report had not been expected until after the market’s close. Trading of the stock was halted at 12:50 p.m. after Google had fallen as much as 10.5 per cent to a session low of $676. Trading resumed at 3:20 p.m.
After the midday snafu and the stock’s slide, Google was the biggest drag on the S&P 500. Tech stocks suffered, with the S&P 500 information technology index losing 1.53 per cent. Shares of IBM, which disappointed investors a day earlier, lost 2.8 per cent to close at $194.96 and pull the Dow lower.
“It’s a huge impact on the market, and especially the tech stocks,” said Paul Nolte, managing director at Dearborn Partners in Chicago. “What happened to Google is a continuation in the tech sector of some very poor earnings numbers. But we’re not seeing the same lack of performance across the board from other sectors.”
The Dow Jones industrial average dipped 8.06 points, or 0.06 per cent, to close at 13,548.94. The Standard & Poor’s 500 Index shed 3.57 points, or 0.24 per cent, to 1,457.34. The Nasdaq Composite Index fell 31.26 points, or 1.01 per cent, to end at 3,072.87.
The day’s declines snapped the S&P 500’s three-day string of gains, which had pushed the benchmark index up 2.3 per cent through Wednesday’s close.