US tech earnings weigh on markets

Published on NewsOK Modified: July 19, 2013 at 11:10 am •  Published: July 19, 2013
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LONDON (AP) — Disappointing earnings from two U.S. technology giants weighed on global markets Friday after a stellar run that has seen Wall Street's main indexes post a series of all-time highs.

Stocks around the world have had a solid week, especially after U.S. Federal Reserve Chairman Ben Bernanke indicated that the central bank's monetary stimulus may remain in place for longer than many in the markets had been predicting.

As a result, investors were looking for a reason to book some profits ahead of the weekend and the earnings figures from Google and Microsoft gave them that opportunity, despite a solid report from General Electric.

Google's quarterly report showed its average ad rate fell from the previous year for the seventh consecutive quarter. In an unexpected turn, the decline deepened for the first time in a year.

Microsoft booked a large write-off to its Surface RT business after it slashed prices on the tablets to stimulate demand this week. Its quarterly earnings results also showed that Windows 8, an operating system designed to bridge the divide between PCs and tablets, has been so poorly received that it contributed to a revenue drop in the operating system software unit.

The bad news for Microsoft continued into Friday with its stock losing more than a tenth of their value. By lunchtime in New York, the company's shares were down 10.6 percent at $31.66.

"Results from technology companies have generally been poor with eBay and Intel also missing expectations," said Fawad Razaqzada, technical analyst at GFT Markets. "Overall, however, most of the S&P 500 companies who have reported their results have beaten earnings expectations; though, one has to be wary of jumping to conclusions because it is merely early days still."

In Europe, the FTSE 100 index of British shares closed Friday barely changed on the day, off 0.04 percent at 6,630, while Germany's DAX fell 0.07 percent to 8,331. The CAC-40 in France was down 0.06 percent at 3,925.