Google shares slump, pull market lower
The search giant's results -- released early -- disappoint and slam tech shares. Microsoft's earnings don't excite. Investors hate Chipotle's results. Travelers and Verizon earnings impress. Gold and oil slip.
Tech stocks took a dive today after earnings from Internet search giant Google (GOOG) were released early -- and disappointed investors.
Google shares slumped $68.10 to $687.39 before trading was halted and closed down $60.49 to $695. (Trading resumed at 3:20 p.m. ET.) Earnings of $9.03 a share (after one-time charges) missed the Street estimate by $1.62 and were down from $9.72 a year ago. Revenue of $11.33 billion, up 45% from a year ago, nonetheless missed the consensus estimate of $11.86 billion.
Google's miss was so bad that CEO Larry Page, his voice sounding strained, began the company's conference call by apologizing for the "scramble" in the afternoon. The scramble pulled shares of Facebook (FB), Yelp (YELP), Groupon (GRPN) and Zynga (ZNGA) lower. Tech shares were already weak because of a decline in shares of Apple (AAPL).
Microsoft (MSFT) was lower in regular trading and fell further after hours after its fiscal-first-quarter earnings were released. Shares of Chipotle Mexican Grill (CMG) fell more than 10% after hours as results disappointed investors. (Microsoft publishes MSN Money.)
The damage from Google was largely confined to tech land. The Nasdaq Composite Index ($COMPX) closed down 31 points to 3,073. The Nasdaq-100 Index ($NDX) tumbled 31 points to 2,744. Both moved up from lows when Google trading resumed. But the Dow Jones industrials ($INDU) were off just 8 points to 13,549. Right after the Google news, the blue chips had been down as many as 31 points. The Standard & Poor's 500 Index ($INX) fell 4 points to 1,457. Google is an S&P 500 component, but isn't in the Dow.
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Gold (-GC) and oil prices were lower today as the dollar rose against the euro. Gold closed down $8.30 to $1,744.70 an ounce. Crude oil (-CL) in New York dropped 2 cents to $92.10 a barrel. Brent crude, the benchmark North Sea crude that has the most influence on gasoline prices, was off 81 cents to $112.41 a barrel.
The national average retail price of gasoline was $3.737 a gallon, according to AAA's Daily Fuel Gauge Report. That's down from Wednesday's $3.773 and down 1.9% this week.
The 10-year Treasury yield rose to 1.826% from Wednesday's 1.811% and 1.663% on Oct. 12.
Friday's earnings include results from General Electric (GE), McDonald's (MCD) and Baker
Hughes (BHI). The National Association of Realtors reports on September existing-home sales.
Futures trading suggests a flat open for stocks. That probably reflects investors' waiting for the outcome of the election and any negotiations about the fiscal cliff -- the combination of required spending cuts and automatic tax increases if Congress and the White House can't agree on a spending plan.
Microsoft shares fall on earnings
Microsoft shares were down 45 cents, or 1.5%, to $29.05 after hours. The stock had closed at $29.50, down 9 cents.
Revenue of $16.01 billion and earnings of 53 cents a share using generally accepted accounting were off 8% and 22%, respectively, from a year ago. Wall Street was expecting 56 cents and revenue of $16.42 billion.
When deferred revenue for pre-sales of the new Windows 8 operating system are added -- about $1.36 billion -- the company earned 65 cents a share on revenue of $17.4 billion. Under that scenario, earning were down 4% from a year ago. Revenue was even with a year ago.
Revenue from the Windows division fell 33.4% to $3.24 billion from a year ago. Operating profit for the business was off nearly 50% to $1.65 billion. Much of the decline was believed to be customers waiting for Windows 8, but the slowdown in personal computer sales also was a factor.
Microsoft's other businesses mostly saw revenue gains. The entertainment and devices business saw operating profit fall 94%. The online business group, which includes Bing and the MSN portfolio of websites enjoyed an 8.7% revenue gain to $697 million. Its loss fell 29% to $364 million.
Chipotle growth slow; stock is punished
Chipotle was punished basically because its same-store sales growth fell to 4.8% in the third quarter, the slowest growth in 10 quarters. Most of the other quarters showed growth of 10% a year or more. Analysts estimated an increase of 4.9%, according to Bloomberg News.
The company earned $72.3 million, or $2.27 a share, in the quarter, up 20% from a year ago. Analysts had expected $2.29 a share in earnings. Revenue was up 18% to $700.5 million.
The company expects same-store sales to be flat or grow a little.
Chipotle fell $29.83 to $256.10 after a fall of $4.07 to $285.93. If the after-hours price holds through Friday, the stock will have declined more than 40% since mid-April.
EBay, Lam Research, Green Mountain Coffee can't carry the Nasdaq
The Nasdaq-100's decline came despite sizable gains for Lam Research (LRCX), Green Mountain Coffee Roasters (GMCR) and eBay (EBAY). EBay was up $2.63 to $50.83 after its earnings, reported late Wednesday, cheered investors.
Lam Research was the top S&P 500 and Nasdaq-100 performer. EBay was second on the Nasdaq-100 and third among the S&P 500 stocks.
Apple fell $11.97 to $632.64, its first decline after two days of gains. The stock is down 5% this month, although it is still up nearly 58% this year.
IBM (IBM) was the Dow loser, down $5.67 to $194.96. The shares are down 7.6% in the two days since reporting earnings Tuesday that disappointed investors -- subtracting 123 points from the Dow in the process.
Advertising pressures weigh on Google's miss
Google results were released, apparently by mistake, in a Securities and Exchange Commission filing. Google blamed RR Donnelley (RRD). A Donnelley subsidiary made the early SEC filing.
RR Donnelley, one of the nation's largest printers of everything from telephone books and magazines to fliers and financial documents, was off 10 cents to $10.76.
The release includes the phrase "PENDING LARRY QUOTE" in a spot for a to-be-added quote from CEO Larry Page. The company had expected to release its report after today's close.
The problem with the earnings wasn't just the miss. Cost per click -- a key measurement of the company's revenue growth -- fell 3% in the third quarter from the second. And it was off 15% from the 2011 third quarter.
Advertising revenue overall was up 16% from a year ago. Google generally pulls in less revenue from the advertising placed on mobile devices than from ads that appear on traditional personal computers, The Wall Street Journal noted. That's helped create a downward trend for advertiser prices on Google, which has caused some concern. It's also been a worry for Facebook.
The rest of the revenue gain over a year ago came from Motorola. A stronger dollar through the quarter depressed reported international revenue by $136 million. About 53% of revenue comes from outside the United States, down slightly from a year ago.
Revenue from its Motorola Mobility business was down 21% to $2.58 billion from a year ago. The business reported a loss of $527 million under generally accepted accounting. That includes $349 million in restructuring charges. The loss drops to $151 million under non-GAAP rules.
|Energy prices -- New York close|
|Thur.||Wed.||Month chg.||YTD chg.|
|Crude oil (-CL)||$92.10||$92.12||-0.10%||-6.81%|
|Heating oil (-HO)||$3.1866||$3.1894||0.87%||9.35%|
|Natural gas (-NG)||$3.5870||$3.4700||8.04%||20.01%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.7269||$2.7642||-6.62%||2.62%|
|(per gallon; AAA)|
Jobless claims jump
The market opened lower after initial jobless claims jumped to a seasonally adjusted 388,000 in the latest week from 342,000 a week earlier. The big swing is due to incomplete processing of claims in California two weeks ago, resulting in a big drop in reported claims. And then the data were updated for the latest week.
A boost to the market -- before the Google earnings -- was the Philly Fed Index, the measure of manufacturing activity in the region served by the Federal Reserve Bank of Philadelphia.
The index rose to 5.7 for October, compared with expectations for a gain to 1.9. The index was at -1.9 in September. In addition, The Conference Board’s index of leading economic indicators climbed 0.6% in September.
Homebuilding shares and shares of companies tied to housing were mostly higher. One reason: Executives at USG (USG), one of the largest makers of wallboard, said they worried that labor shortages may be a big headache as the nascent housing recovery moves into 2013. USG shares fell 10% after the company released its third-quarter earnings.
But the shares were up $1.94 to $24.67.
Travelers, Verizon earnings impress
Travelers (TRV) earned $864 million, or $2.21 a share, up from $333 million, or 79 cents a share, a year ago -- and well ahead of the consensus forecast. Revenue was up 2% to $6.51 billion. A big drop in catastrophe losses helped the bottom line. Shares jumped $2.56 to $73.94. The stock was the top performer among the 30 Dow stocks.
Verizon Communications (VZ) earned $1.59 billion, or 56 cents a share, in the third quarter, up from $1.38 billion, or 49 cents, as year ago. The telecom carrier’s revenue rose nearly 4% to $29.01 billion. Excluding one-time charges, earnings rose 14% to 64 cents a share. Verizon reported that wireless revenue was a big profit driver, allaying worries that heavy smartphone usage would hit profits. Shares rose $1.06 to $45.78. The stock was the second-best Dow performer.
Morgan Stanley (MS) reported a third-quarter loss of slightly more than $1 billion, or 55 cents a share, down from earnings of $2.15 billion, or $1.15 a share a year ago. Revenue fell to $5.29 billion from $9.81 billion. Excluding a debt valuation adjustment, quarterly revenue would have been $7.6 billion and income from continuing operations would have been 28 cents a share, Morgan Stanley said. Analysts had been looking for adjusted earnings of 24 cents a share on revenue of $6.36 billion. Shares were off 70 cents to $17.79.
|Short hits from the markets -- New York close|
|Thur.||Wed.||Month chg.||YTD chg.|
|13-week Treasury bill||0.1000%||0.110%||11.11%||900.00%|
|5-year Treasury note||0.780%||0.772%||23.81%||-6.02%|
|10-year Treasury note||1.826%||1.811%||11.55%||-2.41%|
|30-year Treasury bond||3.007%||2.988%||-0.82%||4.08%|
|U.S. Dollar Index||79.425||79.059||-0.75%||-1.36%|
|(in U.S. $)|
|U.S. $ in pounds||£0.623||£0.619||0.63%||-3.25%|
|Euro in dollars||$1.31||$1.31||1.65%||0.84%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.765||€ 0.762||-1.62%||-0.83%|
|U.S. $ in yen||79.43||79.05||1.87%||3.02%|
|U.S. $ in Chinese||6.27||6.25||-0.12%||-0.83%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$92.10||$92.120||-0.10%||-6.81%|
The CNG Cylinder, which stores the compressed natural gas, is one of the safest factors of using CNG as an alternative fuel.
The idea of natural gas being compressed to 3,600 psi and stored in a vehicle tends to frighten some people away. They're afraid of rupture or explosion, when in fact, the likelihood of either of those occurring is far slimmer with a CNG Cylinder than it would be with a gasoline or diesel tank.
Wise Gas, Inc. only works with approved CNG-cylinders. Our team is willing to inspect unapproved cylinders for consideration of pursuing approval certification, however, we will not install, repair or provide fuel to any vehicle using an unapproved cylinder for safety and legal reasons.
There is nothing scary about CNG or the cylinders that they are stored in. The fact is that CNG cylinders are put through exhaustive and extreme tests which include firing bullets at the canister, roasting it over a roaring bonfire and impact tests in which a crane drops the cylinder at multiple impact points. Compare this to the 1/16th of an inch thick, or plastic, gasoline tanks in today's vehicles containing a much more flammable and toxic substance.
If you voted for odumbo we can forgive you He is slick puts willie to shame but if you vote for him this time you deserve what you get.
===Asked if that was a backtrack, Crowley said, “No. The question was — we got so stuck on that ‘act of terror.’ Now, did the President say this was an act of terror? The president did not say — he said ‘these acts of terror,’ but he was in the Rose Garden to talk about Benghazi, so I don’t think that’s a leap.” (The exact phrase Obama : “no acts of terror.”)======
Here’s what Obama said in that Rose Garden speech: “No acts of terror will ever shake the resolve of this great nation, alter that character, or eclipse the light of the values that we stand for.” Now Romney would have been on safer ground if he charged that Obama didn’t call it a coordinated terrorist attack by al Qaeda-affiliated elements, and the Romney spinners after the debate made that point. But Romney used a different term -- “act of terror” -- and Obama DID SAY that. And afterward, Romney appeared rattled after he allowed himself to get caught up on the losing end of a semantic argument. Romney was not the same candidate after that======
I am not sold on compressed natural gas in vehicles. Seems to me driving around with a tank of that in every car means explosion time. Imagine an accident where the tank is not ruptured but bent or deformed, what would the change in pressure do to the compressed gas? Maybe I am wrong but while gasoline is flamable nat gas is explosive. With all the crappy drivers out there that to me spells trouble.
Sell-'al-ma-shares-geddon should start tomorrow. Hopefully I'm wrong.
And I know there are lots of people with statistical data about the market that would contradict me, but you're missing the whole point of statistics - it only applies for in-control systems. This one is at the brink of being out of control, with multiple triggers just waiting to put it in a nasty spin.
1 CLASSIC LADY;Where were you in 2007 and 2008 when both wars were off the
Northeastern University just released a study that 53% of new college grads are unemployed or underemployed - must be too many art history majors, couldn't possibly be the crappy economy...
Student loan debt at record levels - $26k per student, up 5% from a year ago.
Lots comments about Anne Romney's dress at the debate costing $1600. No mention at all of Michelle's dress costing more than $3k. Probably just an innocent oversight.
Gallup has Romney leading 51-45, but that story doesn't seem to be plastered all over the MSM.
Oh well, doesn't matter who wins next month anyway, the Fed will still be there to stuff another $40 billion into the economy and as long as stocks go up, no one cares, right? By the way, only 55 million shares traded on the Dow in the first 4 hours of trading. Remember the good old days, when Buffett would fart and 50 million shares would come shooting out? Back then we'd see a billion shares trade hands just about everyday - not anymore. Apparently the economy is so strong, no one wants to trade stocks anymore.
Close the banks. End the Federal Reserve. Get rid of Wall Street. It was only ever about job recovery.
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[BRIEFING.COM] The major averages began the new trading week on a slightly lower note with small caps leading the weakness. The Russell 2000 shed 0.3% while the S&P 500 slipped less than a point with six sectors ending in the red.
Equity indices began the day in negative territory with only the Nasdaq (-0.04%) making a very brief appearance in the green. After sliding through the first hour of action, the major averages reversed and spent the remainder of the session climbing off ... More
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