Closing Bell: Microsoft, Google Miss on Profit; S&P Still Manages Record

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Technology stocks led the Nasdaq composite index lower Friday after disappointing earnings from Google. Also underperforming was Microsoft, which dealt a big blow to the Dow Jones industrial average. The Standard & Poor's 500 index edged up to set another record.

The Dow (^DJI) fell 4.65 points, or 0.03 percent, to 15,544, while the S&P 500 (^GPSC) gained 2.72 points, or 0.2 percent, to 1,692. The tech-heavy Nasdaq (^IXIC) fell 23.66 points, or 0.7 percent, to 3,587.61.

Microsoft (MSFT) fell sharply after the company wrote off $900 million for expected losses on its Surface tablet and reported declining revenues for its Windows operating system. The stock lost more than 11 percent to close at $31.40. If not for declines in Microsoft, Hewlett-Packard (HPQ) and IBM (IBM), the index would have gained about 70 points.

Google (GOOG) dropped after it reported revenues that fell below analyst forecasts, partly because the Internet search leader's ad prices took an unexpected turn for the worse. Shares of the Internet-search giant toppled $14.08, or 1.6 percent, to $896.60.

Chipmaker Advanced Micro Devices (AMD) also posted earnings that worried investors. The company's stock plunged 61 cents, or 13.2 percent, to $4.03 after it announced a second-quarter loss on lower revenue stemming from a worldwide slump in PC demand.

Disappointing earnings from Microsoft and Google were preceded Thursday by poor results from Intel (INTC) and eBay (EBAY). Technology stocks in the S&P 500 have lagged this year, gaining only 8.8 percent, while the broader index is up 18.4 percent.

U.S. municipal bonds fell the most in nearly a month on news that Detroit had filed for the largest municipal bankruptcy in U.S. history, adding to a slew of concerns about the $3.7 trillion market. The increase in yields, which move inversely to prices, was the steepest since June 24, when the U.S. Federal Reserve rattled markets with plans to scale back its bond-buying program.

The price of crude oil edged up a penny to $108.05 a barrel. The price of gold climbed $8.70 to $1,292.90 an ounce.

Other stocks in the news:
  • ManpowerGroup (MAN) reported its second-quarter net income jumped 66 percent, as cost cuts made up for sliding sales. The staffing company earned $68.2 million, or 87 cents a share, up from $41 million, or 51 cents a share, compared to a year ago; revenue fell 3 percent. The stock rose $3.85, or 6.2 percent, to $65.69.
  • General Electric (GE) rose $1.09, or 4.6 percent, to $24.72 after it posted a slight gain in net income in the second quarter and said its U.S. operations are picking up steam. The results were better than analysts had forecast.
  • Chipotle Mexican Grill (CMG) climbed $32.22, or 8.6 percent, to $408.97 after the chain reported results that beat analyst expectations.
  • Whirlpool (WHR) surged $9.54, or 8 percent, to $128.91 after its second-quarter net income soared 75 percent as demand improved for its appliances. The manufacturer also benefited from some tax credits.
  • Shares of RetailMeNot (SALE), a provider of online coupon codes for retailers, jumped after the company and some of its shareholders raised $190.9 million in its initial public offering. The shares rose $6.70, or 31.9 percent, to $27.70.
  • Oilfield-services company Baker Hughes (BHI) said its second-quarter profit fell 45 percent as it cut operations in Brazil and Mexico. The company earned $240 million, or 54 cents a share, down from $439 million, or $1 a share, a year ago. Revenue rose 2.2 percent to $5.49 billion. The stock fell $1.28, or 2.6 percent, to $47.80.

What to watch Monday:
  • The National Association of Realtors releases existing home sales for June at 10 a.m. Eastern time.
These major companies are scheduled to report quarterly earnings:
  • Gannett Co. (GCI)
  • Halliburton Co. (HAL)
  • Hasbro Inc. (HAS)
  • Kimberly-Clark Corp. (KMB)
  • McDonald's Corp. (MCD)
  • Netflix Inc. (NFLX)
  • Texas Instruments Inc. (TXN)

-Compiled from staff and wire reports.

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