Google tops $600; bank stocks sag

Updated: 6:14 p.m. ET

Financial stocks were banged around all day because of the housing foreclosure mess. Technology stocks soared, especially Google (GOOG), which closed above $600 for the first time since January.

And the rest of the stock market? Well, it just muddled along. As a result, the Dow Jones industrials ($INDU) closed down 32 points to 11,063, with declines in General Electric (GE), Bank of America (BAC) and JPMorgan Chase (JPM) contributing about two-thirds of the decline.

• Find the best broker for you

The Standard & Poor's 500 Index ($INX) was up 2 points to 1,176, with seven of the 10 sectors, led by technology, showing gains. Meanwhile, the Nasdaq Composite Index ($COMPX) added 33 points, or 1.4%, to 2,469. The Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq stocks, was up 43 points, or 2.1%, to 2,098.

For the record, Google was up 11.2% to $601.45, its first close above $600 since Jan. 11 and its biggest percentage gain since Oct. 28, 2008.

Google's gain was part of a big day for tech stocks generally.

Apple (AAPL) rose 4.1% to a new high of $314.74, a new closing high. Amazon.com (AMZN) jumped 5.9% to $164.64. And the top three performers among the 30 Dow stocks: Hewlett-Packard (HPQ), up 1.6% to $42.82; Cisco Systems (CSCO), up 1.3% to $23.36, and Microsoft (MSFT), up 1.2% to $25.54. (Microsoft is the publisher of MSN Money.)

Google's third-quarter earnings crushed analyst estimates. The gain also reflected hopes that its Android operating system for mobile phones will translate into big revenue ahead.

Stocks that also moved today:

• Seagate Technology (STX), up 22.2% to $15.51. Reports said TPG Capital and KKR & Co. (KKR) may offer $16 a share to take the disk-drive maker private. That would value Seagate at $7.55 billion. Rival Western Digital  (WDC) jumped 8.1% to $31.89.
• Mattel (MAT), down 6.5% to $22.45. The loss was the worst among Nasdaq-100 stocks. The toymaker posted third-quarter profit that missed some analysts’ estimates as sales of its Fisher-Price brand sank.
• Gannett (GCI), down 8.8% to $12.85. The owner of USA Today and television stations reported third-quarter revenue of $1.31 billion, below the Street estimate of $1.32 billion.
• Gulfport Energy (GPOR), up 3.9% to $16.37. The Oklahoma City oil-and-gas producer gas will replace American Physicians Capital  (ACAP) in the S&P SmallCap 600 Index (SML.X) after the Oct. 20 close.

Separately, former Countrywide Financial Chairman Angelo Mozilo and two defendants reached an agreement with federal regulators to settle civil fraud and insider-trading charges.

The SEC alleged that the defendants hid from the public the problems in Countrywide's portfolio of risky loans. Those problems eventually forced the mortgage giant's 2008 sale to Bank of America, which isn't involved in the SEC suit. 

Mozilo agreed to $67.5 million in penalties and disgorged profits, Bloomberg News reported.

Markets for the week
			10/15/2010			10/8/2010			% chg.			YTD chg.
Dow industrials			11,062.78			11,006.48			0.5%			6.1%
S&P 500			1,176.19			1,165.15			0.9%			5.5%
Nasdaq			2,468.77			2,401.91			2.8%			8.8%
Russell 2000			703.16			693.82			1.3%			12.4%
Crude oil			$81.25			$82.66			-1.7%			2.4%
(per barrel)
U.S. Dollar Index			77.268			77.56			-0.4%			-1.2%
10-yr. Treasury			2.58%			2.38%			8.2%			-33.0%
Gold			$1,372.00			$1,345.30			2.0%			25.2%
(per troy ounce)

Dollar up, gold and oil down
As the market struggled, the dollar moved higher against major currencies. Gold settled down $5.60 to $1,372. Crude oil dropped $1.44 to $81.25.

Interest rates moved higher. The 10-year Treasury yield rose to 2.576% from 2.495% on Thursday. The 30-year bond yield hit 4%, up from 3.898% on Thursday.

Stocks end week higher
Stocks finished the week higher. The Dow rose 0.5%, with the S&P 500 up 1% and the Nasdaq up 2.8%, thanks to Google's big gain and Apple's surge over $300 this week.

Apple is up 49.4% for the year, compared with 6.1% for the Dow, 5.5% for the S&P 500 and 8.8% for the Nasdaq. Since it represents more than 20% of the Nasdaq-100, it is the big reason why the index is up 12.8% for the year.

Google's performance and a report showing a surprising gain in retail sales in September should have been enough to give the market greater overall support.

But GE's surprisingly weak revenue and the banks weighed   on the market all day.

And this was no help: Consumer sentiment slipped to 67.9 in October from 68.2 in September, according to the University of Michigan's preliminary look at consumer confidence. The market had been anticipating an increase to 68.5. Lackluster consumer spending has been a source of concern among economists and investors.

Meanwhile, as expected, Federal Reserve Chairman Ben Bernanke told a Boston audience that he considers current conditions "to be a case for further action." Many analysts believe the action will come in November.

Energy prices -- New York close
			Fri.			Thur.			Month chg.			YTD chg.
Crude oil			$81.25			$82.69			1.60%			2.38%
(per barrel)
Heating oil			$2.2308			$2.2839			-8.57%			5.45%
(per gallon)
Natural gas			$3.5350			$3.6570			-8.70%			-36.56%
(per mil. BTU)
Unleaded gasoline			$2.1038			$2.1365			2.89%			2.48%
(per gallon)
Retail gasoline			$2.8330			$2.8280			5.36%			7.35%
(per gallon; AAA)

Industrial sales hold back GE results
The GE problem was that third-quarter earnings beat estimates, but revenue fell 5% to $35.9 billion, falling short of estimates for $37.4 billion. GE shares were off 5% to $16.30.

The company cited slack demand for wind turbines, railroad locomotives and other heavy equipment. For analysts, that cast doubts about the pace of the U.S. recovery.

"I'm a little concerned about the broader manufacturing sector, that this may be a bit of a harbinger," said Peter Sorrentino, portfolio manager at Huntington Asset Advisors in Cincinnati.

The picture will become clear next week when United Technologies (UTX), Caterpillar CAT) and Honeywell (HON) report results.

Profit from continuing operations -- which factors out GE's pruning of its finance arm, primarily the sale of its Japanese consumer lending business -- came to $3.16 billion, or 29 cents a share, up 29% from $2.45 billion, or 22 cents a share, a year earlier. On that basis, GE beat the consensus analyst forecast by 2 cents a share.

The foreclosure mess hits banks
The problem for the banks was increased worries that the foreclosure documentation mess will evolve into something quite serious.

Bank shares have been hit by the growing concern. Bank of America, the nation's biggest servicer of mortgages, was down 4.9% to $11.98 after falling to a 52-week low of $11.74 early in the day. The stock is down 9.6% this week alone. The KBW Banks Index ($BKX) was down about 2.5% to 45.

It is still unclear if the joint probe by the U.S. state attorneys general and other reviews by bank regulators will ultimately reveal evidence of widespread fraud.

"While there will likely be some legal costs stemming from documentation issues, we don't think ultimate losses will be impacted by foreclosure moratoriums," Nomura's Glenn Schorr said.

Given the long timeline and earnings power of these firms, legal and servicing costs will be high, but the banks will earn their way through, he added.

So far, the Obama administration has rejected calls for a nationwide moratorium on foreclosures, but some banks are taking matters into their own hands.

Short hits from the markets -- New York close
			Fri.			Thur.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.140%			0.140%			-6.67%			180.00%
5-year Treasury note			1.186%			1.175%			-8.35%			-55.85%
10-year Treasury note			2.576%			2.495%			2.06%			-32.97%
30-year Treasury bond			3.727%			3.727%			0.81%			-19.69%
Currencies
U.S. Dollar Index			77.268			76.881			-2.12%			-1.22%
British pound			$1.6036			$1.6015			2.00%			-0.87%
(in U.S. $)
U.S. $ in pounds			£0.6236			£0.6244			-1.97%			0.87%
Euro in dollars			$1.4025			$1.4085			2.68%			-2.15%
(in U.S. $)
U.S. $ in euros			€ 0.7130			€ 0.7100			-2.61%			2.19%
U.S. $ in yen			81.50			81.44			-2.61%			-12.37%
U.S. $ in Chinese			6.66			6.65			-0.81%			-2.37%
yuan
Canada dollar			$0.989			$0.996			1.78%			4.02%
(in U.S. $)
U.S. dollar			$1.011			$1.004			-1.85%			-3.96%
(in Canadian $)
Commodities
Gold			$1,372.00			$1,377.60			4.76%			25.16%
(per troy ounce)
Copper			$3.8390			$3.8155			5.13%			14.72%
(per pound)
Silver			$24.2880			$24.4350			11.31%			44.19%
(per troy ounce)
Wheat			$7.0450			$7.0075			4.53%			30.10%
(per bushel)
Corn			$5.6300			$5.6725			13.57%			35.83%
(per bushel)
Crude oil			$81.25			$82.69			1.60%			2.38%
(per barrel)