NEW YORK, N.Y. – U.S. stocks fell, snapping a three- day advance in the Standard & Poor’s 500 Index, as Google Inc. pulled down technology shares after reporting third-quarter profit and sales that missed estimates.
Google dropped 8 percent after the earnings report was filed inadvertently during regular trading hours. Technology shares had the biggest decline among 10 groups in the S&P 500. Philip Morris International Inc. dropped 4.2 percent as earnings trailed analysts’ estimates. Travelers Cos. gained 3.6 percent as earnings more than doubled on lower claims costs tied to natural disasters.
The S&P 500 fell 0.2 percent to 1,457.34 at 4 p.m. in New York. The index gained as much as 0.2 percent earlier as a rise in jobless claims was offset by better-than-estimated data on leading indicators and Philadelphia manufacturing. The Dow Jones Industrial Average slid 8.06 points, or 0.1 percent, to 13,548.94 today. The Nasdaq-100 Index tumbled 1.1 percent to 2,744.17. About 6.9 billion shares traded hands on U.S. exchanges, 14 percent above the three-month average.
“Google failed to meet expectations and then also mistakenly released in the middle of the day,” Giri Cherukuri, a portfolio manager for Oakbrook Investments LLC, which manages $3 billion, said in a telephone interview. “Google is a big company and on top of the fact that they missed estimates, they talked about advertising in the online world not doing as well as previously thought.”
YouTube Goes Down; Not Google’s Best Day
Trading in Google’s stock was halted at about 12:50 p.m. New York time, and resumed at 3:20 p.m. after the company released a final version of its earnings document. The company said R.R. Donnelley & Sons Co. released a draft of the quarterly results without permission. Google tumbled the most since January, losing 8 percent to $695.
Google’s profit and sales missed analysts’ estimates, a sign that its tools are becoming less valuable to advertisers while costs associated with expansion into new businesses are chipping away at profitability. The average amount advertisers paid each time a user clicks on a promotion declined about 15 percent from a year earlier, and was 3 percent less than the prior period.
“The downward move in the market is more a result of the fundamentals,” Walter Todd, who oversees about $940 million as chief investment officer of Greenwood Capital in Greenwood, said in a phone interview. “The fact that it was released early, it exacerbates the dynamic but I don’t think we would have fallen any less if the numbers had come out after the market.”
Ironically, YouTube went down as it was about to begin live streaming its earnings call on the service. Users received a 500 server error message as many tried to visit YouTube starting at around 4:15 p.m. EDT on Thursday. The site went down for about 15 minutes and was restored for most by 4:30 p.m.
Crimping Demand
Technology shares erased 1.5 percent as a group in the S&P 500. Apple Inc. slid 1.9 percent to $632.64 and International Business Machines Corp. dropped 2.8 percent to $194.96. AOL Inc. declined 1.9 percent to $36.36. Online-coupon provider Groupon Inc. slipped 3.4 percent to $4.91. Facebook Inc., the world’s most popular social-networking service, lost 4.6 percent to $18.98.
Microsoft Corp. fell 2.4 percent to $28.79 at 5:11 p.m. as it released results after the close of regular trading. The largest software maker reported fiscal first-quarter profit and sales that fell short of analysts’ estimates as declining personal computer sales crimped demand for Windows, its core operating system.
U.S. stocks slumped early in the trading day as Labor Department figures showed more Americans than forecast filed applications for unemployment benefits last week, reflecting an unwinding of adjustments for seasonal swings at the start of a quarter.
