Disappointing quarterly results from Google combined with
mixed economic reports dragged the benchmarks into negative
territory. As for domestic economic readings, initial claims
increased more than expected from the previous week, while
Philadelphia Fed's monthly manufacturing report revealed business
activity had jumped in October after contracting for five
The Dow Jones Industrial Average (DJI) lost 0.1% to close the
day at 13,548.94. The Standard & Poor 500 (S&P 500)
slipped 0.2% to finish yesterday's trading session at 1,457.34.
The tech-laden Nasdaq Composite Index inched down 1% to end at
3,072.87. The fear-gauge CBOE Volatility Index (VIX) lost 0.3% to
settle at 15.03. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.9
billion shares, slightly higher than the year-on-year daily
average of 6.52 billion. The decliners on the New York Stock
Exchange outpaced the advancing stocks; as for 47% stocks that
gained, 49% stocks closed lower.
Google Inc (NASDAQ:
), the world's leading internet search engine, delivered a
surprise, reporting its quarterly reports before the closing
bell, which revealed that earnings had dropped way below
analysts' estimates. Following the disappointing results, the
company's shares slumped 10.5% and trading was briefly halted. At
the end of the trading day, Google's shares were down 8% and
closed at $695.00 per share. According to Google, the unexpected
decline in its third-quarter earnings was due to weakness in its
core internet advertising business and continual losses from its
recently acquired cell phone business, Motorola Mobility.
Google's core internet business has fallen below 20% for the
first time since 2009.
The technology sector has witnessed several discouraging
results from its bellwethers. Earlier, Intel Corporation (NASDAQ:
) and International Business Machines Corp. (NYSE:
) had reported weak numbers. IBM's revenues declined 5.4% from
the year-ago quarter and all of the company's operating segments
suffered a downtrend. On the other hand, Intel, the world's
largest chip maker, had provided a weak revenue outlook. The
Technology Select Sector SPDR fell 1.2% yesterday. Stocks such as
IBM, Intel, Oracle Corporation (NASDAQ:
), Microsoft Corporation (NASDAQ:
) and Nuance Communications Inc. (NASDAQ:
) lost 2.8%, 0.6%, 0.4%, 0.3% and 4.0%, respectively.
Meanwhile, the U.S. Department of Labor said initial claims
increased more than expected from the previous week. According to
the report, the advance figure for seasonally adjusted initial
claims increased by 46,000 to 388,000 from the prior week's
342,000 for the week ending October 13. This was above consensus
estimates of 361,000.
Separately, the Federal Reserve Bank of Philadelphia released
monthly business activity data, which revealed that business
activity increased to 5.7 from minus 1.9 in September. This also
compared favorably with consensus estimates which had projected
an increase to 1. This is the first positive reading since April
2012. However, the demand for manufacturing goods declined by 2
points to -0.6. The employment component of the index is at its
lowest level since September 2009.
Meanwhile, Morgan Stanley (NYSE:
) reported better-than-expected third-quarter earnings, which was
boosted by revenue from bond trading. However, its shares tumbled
by 3.3%, much like the drop in stocks of JPMorgan Chase & Co.
) and Goldman Sachs Group, Inc. (NYSE:
) after they reported better-than-expected results.
However, the financial sector finished in the green yesterday
and the Financial Select Sector SPDR rose 0.2%. Stocks such as
Wells Fargo & Company (NYSE:
), KeyCorp (NYSE:
), Goldman Sachs, U.S. Bancorp (NYSE:
) and Shinhan Financial Group Co., Ltd (NYSE:
) gained 0.3%, 4.4%, 0.2%, 0.6% and 1.0%, respectively.
Meanwhile Consumer Staples Select Sector SPDR was the major
loser, slipping 0.6%. Stocks such as Philip Morris
International Inc. (NYSE:
), Vector Group Ltd, British American Tobacco PLC, Reynolds
American, Inc. (NYSE:
) and Altria Group, Inc. (NYSE:
) lost 4.2%,1.1%,1.4%, 0.8% and 1.2%, respectively.
GOOGLE INC-CL A (GOOG): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis
INTL BUS MACH (IBM): Free Stock Analysis
INTEL CORP (INTC): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis
KEYCORP NEW (KEY): Free Stock Analysis Report
ALTRIA GROUP (MO): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
NUANCE COMM INC (NUAN): Free Stock Analysis
ORACLE CORP (ORCL): Free Stock Analysis
PHILIP MORRIS (PM): Free Stock Analysis
REYNOLDS AMER (RAI): Free Stock Analysis
SHINHAN FIN-ADR (SHG): Free Stock Analysis
US BANCORP (USB): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis
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