U.S. Stocks Mostly Higher after Google’s Earnings

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U.S. stocks ended mostly up on Friday after Google’s strong earnings reported and comments from Federal Reserve Chairman Ben Bernanke.


Google Inc. (NASDAQ: GOOG) reported 32% increase in third-quarter profit thanks to growing demand for its online advertising. Its strong earnings helped offset worries about a foreclosure crisis for financials. By Friday afternoon, Google shares surged 11% to edge past $600.


Its net income rose to $2.17 billion from $1.64 billion, equivalent to $6.72 a share and $5.13 a share year-on-year respectively. Net revenue for the period ended in September increased to $5.5 billion, $0.2 billion more than analysts’ estimate. Google’s “other revenue” was $254 million.


Bernanke’s speech on Friday was seen as tipping to U.S. Federal Reserve’s next move. Financial markets hoped that the central bank would jump-start a fresh program of buying longer-term U.S. Treasury securities at its November 2-3 meeting.


The Dow Jones Industrial Average lost 0.3% to 11,062.78. Shares of General Electric fell 5%, leading the decliners.


Bank of America Corp’s investment rating on the bank’s shares was slashed by S&P Equity Research. Its shares fell 4.9%. J.P. Morgan Chase (NYSE: JPM) lost 4%.


The Nasdaq Composite Index was up 1.4% to 2,468.77 and the Standard & Poor’s 500 index advanced 0.2% to 1,176.19. Two indexes were spurred by Google’s strong earnings results and decline in technology sector offset across financials.


Seagate Technology PLC (NASDAQ: STX) advanced 22%, followed by its report of being approached by an unnamed party who interested in taking the storage-drive maker private.


The markets were mixed. Financial markets are expecting Fed chairman to clarify the possibility of its announcement of a big program of asset purchases or its option for more modest buying plans.


The U.S. dollar index rose 0.4%. The two-year treasurys rose slightly, pushing its yields down to 0.36%.


According to Russell Napier, global strategist at CLSA, the market had traveled on expectations for a month except forever.


The seasonally adjusted consumer price index for September increased 0.1% from the previous month. Underlying inflation rate remained unchanged in September.


Retail sales in September and New York manufacturing activity in October saw more improvement than expected.


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Lee Dobbins has 433 articles online and 7 fans

Economics is the study of our lives,our jobs, our homes, our families and the little decisions we face every day. Thus, I am keen on reading and studying economic issues.

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U.S. Stocks Mostly Higher after Google’s Earnings

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This article was published on 2010/10/18