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The close: Google results sap market momentum

Stocks ended the day relatively unchanged on Thursday, weighed down by a surprising rise in U.S. jobless claims and an ugly quarterly earnings report from Google Inc.

The Dow Jones industrial average closed at 13,548.94, down 8.06 points or less than 0.1 per cent. The broader S&P 500 closed at 1457.34, down 3.57 points or 0.2 per cent. In Canada, the S&P/TSX composite index closed at 12,466.12, up 4.87 points or zero per cent.

The moves follow a rough start to the day when investors and economists were taken aback by a lurch in U.S. jobless claims. For the period ended last week, claims rose by 46,000, to 388,000. That was well above an expectation of 365,000 claims – and it raises concerns about the U.S. employment situation, which has shown signs of improvement recently.

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Stocks had recovered by midday. But an earnings report from Google – inadvertently published earlier than scheduled – skewered gains when the share price of the technology company fell sharply. It closed down 8 per cent, making it the worst performing stock within the S&P 500.

Google reported earnings of $9.03 (U.S.) a share after excluding some one-time items, well below the $10.65 a share expected by analysts and down from last year. Revenues also missed expectations, partly because of a poor performance of Motorola, the cellphone maker Google bought for $12.5-billion.

RR Donnelley & Sons, the financial printer that reportedly released Google's results too early, fell 0.9 per cent after recovering from a steeper drop in early afternoon trading.

Reactions to other corporate earnings were mixed. Morgan Stanley fell 3.8 per cent after it reported a loss of $1-billion (U.S.), even though its results after one-time adjustments topped expectations among analysts.

Verizon Communications Inc. rose 2.4 per cent after it reported earnings of $1.6-billion or 56 cents a share, up from 49 cents a share last year.

In Canada, BCE Inc. rose 0.3 per cent during regular trading hours, before Canada's broadcast regulator shot down its $3.4-billion (Canadian) deal to buy Astral Media. Astral shares fell 3 per cent during regular trading hours. The Canadian Radio-television and Telecommunications Commission said the deal would place too much market power in the hands of one company.

In the post market, U.S. shares of BCE were down just 0.5 per cent. Microsoft was down 2.8 per cent after its earnings and revenues missed forecasts.

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More


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