×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Google lifts Wall Street in otherwise rough week

Google lifts Wall Street in otherwise rough week
Comment E-mail Print Share
First Published: Sat, Jul 16 2011. 12 39 PM IST
Updated: Sat, Jul 16 2011. 12 39 PM IST
New York: Google’s blowout quarter led the Nasdaq higher on Friday but mounting uncertainty about the government’s ability to reach a debt-reduction deal may keep investors at bay in the coming week.
The gains were a bright spot in a stretch dominated by selling that pushed the S&P 500 down in its worst week in five. Worries about US and European government debt troubles put pressure on the market even as investors expect a batch of strong earnings next week.
For the week, the S&P 500 ended down 2.1%, while the Dow lost 1.4% and the Nasdaq fell 2.5%.
The stock market has largely ignored the acrimonious debate in Washington about raising the debt ceiling, which is necessary to avoid a default. But investors say it is dampening enthusiasm even as most express confidence a deal will be reached.
“We’re drifting and waiting for clarity on all these different issues,” said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.
“Each day, the deck chairs get slightly rearranged,” he said. “We saw the market react to President Obama’s news conference where he continued to provide more detail on progress or lack of progress on negotiations. We saw the market sell off and then bounce back.”
US President Barack Obama held a White House news conference on Friday on the talks. Standard & Poor’s warned late on Thursday that there is a one-in-two chance it could cut the United States’ triple-A rating if an agreement is not reached soon.
Google Inc’s earnings beat the most bullish forecasts late on Thursday, driving its stock up 13% to $597.62, making it the top gainer in the Nasdaq 100. The S&P information technology index rose 1.6%.
The Dow Jones industrial average rose 42.61 points, or 0.34%, to end at 12,479.73. The Standard & Poor’s 500 Index gained 7.27 points, or 0.56%, to finish at 1,316.14. The Nasdaq Composite Index advanced 27.13 points, or 0.98%, to close at 2,789.80.
The CBOE Volatility Index, Wall Street’s fear gauge, ended down 6.1% at 19.53.
The European Banking Authority (EBA) said that of the 90 European banks tested, only eight had failed the “stress tests” performed to determine if they could withstand a long recession. Expectations were for up to 15 banks to fall short.
“The positive is, we’re moving towards increased transparency,” said Paul Ehrlichman, head of global equity at Global Currents in Wilmington, Delaware. “The bank stress tests, if they continue to do them, will reveal more about the weak parts of the banks’ balance sheets.”
Energy was a big mover on BHP Billiton’s $12 billion offer to purchase Petrohawk.
Shares of Petrohawk jumped 62.5% to $38.17. The Select Sector Energy SPDR Fund, an exchange-traded fund, rose 2.6% to $76.86.
Consumer discretionary stocks were among the biggest drags after US consumer sentiment hit its lowest level since March 2009. Home Depot fell 0.1% to $35.91.
Investor Carl Icahn’s offer to buy Clorox Co for $10.2 billion pushed the consumer products company’s stock up 8.9% to $74.55.
Citigroup Inc posted higher net income, helped by falling credit losses. But the stock dropped 1.6% to close at $38.38.
Volume was light, with about 7.12 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s daily average of 8.47 billion.
About three stocks rose for every two that fell on both the New York Stock Exchange and the Nasdaq.
Comment E-mail Print Share
First Published: Sat, Jul 16 2011. 12 39 PM IST
More Topics: Markets | Wall Street | S&P | US stocks | Oil |