Google plunges on shock Q3 report; Dow ends flat
In this Wednesday, Oct. 17, 2012, file photo, people attend a workshop, “New York Get Your Business Online,” at Google offices in New York. Google Inc.’s stock plunged suddenly on Thursday, Oct. 18, 2012, after a contractor prematurely released the search company’s third-quarter earnings report. AP PHOTO/MARK LENNIHAN
NEW YORK—Google’s shares plunged Thursday after a surprise drop in earnings in a prematurely released quarterly report, but while the Nasdaq sank the Dow avoided being pulled down as well.
Google shares closed down 8.0 percent at $695.00, rebounding slightly after hitting a 10 percent floor earlier following the unintended release of its disappointing earnings report at mid-session.
That pulled the Nasdaq down for a loss of 31.25 points, or 1.01 percent, for the day, ending at 3,072.87.
But the Dow Jones Industrial Average, the blue-chips roster that does not include Google, held firm, losing just 8.06 points (0.06 percent) at 13,548.94.
The broad-based S&P 500 felt the effect, though, shedding 3.57 points (0.24 percent) at 1,457.34.
Google, the Internet search and advertising power, reported net profit for the three months at $2.18 billion, compared with $2.73 billion a year ago.
Earnings per share adjusted for special items amounted to $9.03, far below Wall Street expectations of $10.65 per share.
Independent tech analyst Jeff Kagan called the soft results “just a hiccup in Google’s climb” and said the firm was still “on the growth side of the wave.”
The Dow, meanwhile, benefited from strong results from telecoms giant Verizon and insurer The Travelers Companies.
Verizon jumped 2.4 percent on its 16 percent earnings jump for the quarter, boosted by its addition of Apple’s iPhone to its Verizon Wireless mobile offerings.
Travelers gained 3.6 percent as it beat earnings forecasts with a net income of $864 million.
Morgan Stanley shares fell 3.8 percent after the bank reported a $1.0 billion third-quarter loss on a plunge in revenues in its institutional securities and investment banking business and losses from downward revaluation of debt.
American Express dropped 3.0 percent after missing revenue expectations in its quarterly report.
Mobile broadband carrier Clearwire sank 10.2 percent as Sprint Nextel began a push to take control of its business, even as Sprint itself negotiates its takeover by Japan’s Softbank.
Sprint shares were up 0.9 percent.
Online marketplace eBay gained 5.5 percent on its 22 percent profit gain.
US bond prices were lower. The 10-year Treasury yield rose to 1.82 percent from 1.81 percent Wednesday, while the 30-year pushed to 3.00 percent from 2.99 percent.
Bond prices move inversely to yields.
