Google Shares do the Devil Dance|
BLURB: Google Inc. (GOOG) shares did a devil dance on Thursday, plummeting some
70 plus points in a matter of minutes when Q3 earnings that were scheduled to be
released after the bell today, were mistakenly released, way to early.
Google Inc. (GOOG) shares did a devil dance on Thursday, plummeting some 70
plus points in a matter of minutes when Q3 earnings that were scheduled to be
released after the bell today, were mistakenly released, way to early. Trading
in Google shares were halted shortly after the devil dance began to make a
rebound. Google blamed R.R. Donnelley (RRD) for the earnings announcement mishap
after the company's financial printer "filed our draft 8K earnings statement
without authorization." The filing with the Securities and Exchange Commission
included the line, “Pending Larry quote,” apparently referring to Chief
Executive Larry Page. "We have ceased trading on NASDAQ while we work to
finalize the document," Google said in a statement. "Once it's finalized we will
release our earnings and resume trading on NASDAQ. The company reported a Q3
profit of $2.18 billion or $6.53 a share, compared with a profit of $2.73
billion or $8.33 a share for the same period in 2011. Revenue minus traffic
acquisition costs, was $11.33 billion, up from $7.51 billion in same period
2011. Adjusted profit was reported at $9.03 a share. Google said average
cost-per-click - the prices paid for Google’s online ads - slipped nearly 15%
from same period during 2011. Shares of Google ended the trading session
Thursday, down 8% or off by 60 some points.
Abbott Laboratories (ABT) on Thursday announced partner Reata Pharmaceuticals
would halt a clinical study examining the use of bardoxolone methyl in patients
with advanced chronic kidney disease and type 2 diabetes. A monitoring committee
cited “excess serious adverse events and mortality in the bardoxolone methyl
arm,” Abbott said in an Securities and Exchange Commission filing early
Thursday. The clinical trial of an experimental treatment for kidney disease was
discontinued due to safety concerns including an excessive death rate among the
drug's users. Abbott and Reata notified the Food and Drug Administration as well
as other regulatory agencies of the decision to cease the clinical trial and all
ongoing clinical trials with bardoxolone methyl in chronic kidney disease. On
Wednesday, Abbott reported the firm would be laying off 550 workers throughout a
number of its business units and plans to reduce its ranks by “several hundred”
Morgan Stanley (MS) institutional-securities business including investment
banking and sales took a Q3 loss as they were hit by a huge mark-to-market loss
related to the value of its debt. A 79% decline in revenue was included in
Morgan's Q3 results. Fixed income and commodities sales plus, net trading
revenue, rose 36% to $1.5 billion, reflecting higher results in interest rate
products and gains in credit products compared to losses in same period of 2011.
"The rebound in fixed income & commodities sales and trading indicates that
clients have re-engaged after the uncertainty of the rating review in the
previous quarter," Chief Executive James Gorman said. "We are beginning to
unlock the full potential of the Global Wealth Management franchise, having
increased our ownership of, and agreed on a purchase price for the rest of,
Morgan Stanley Wealth Management." In hopes of making business steadier and less
vulnerable to market shocks, Morgan Stanley is embracing a new identity as a
wealth manager, investment bank and trading firm. During September the firm
completed its $1.89 billion acquisition of 14% of the Morgan Stanley Smith
Barney brokerage from Citigroup Inc. (C), raising its ownership stake in the
business from 51% to 65%. The takeover of Morgan Stanley Smith Barney will give
Morgan Stanley access to $53.5 billion in deposits by 2015. Morgan Stanley
reported a loss of $1.02 billion for Q3 compared with a 2011 period profit of
$2.2 billion. The per-share loss reflects the payment of preferred dividends and
was 55 cents compared with a profit of $1.15 same period in 2011. The per-share
profit was 28 cents versus two cents a share same period in 2011 when impact of
debt valuation changes was pulled out. Revenue fell 46% to $5.29 billion,
including a negative impact of $2.3 billion from the tightening of credit
spreads related to debt. Revenue was up 18% to $7.55 billion with debt valuation
changes removed. Compensation expense climbed 6.7% to $1.6 billion, while
non-compensation expense rose 21%, primarily due to increased litigation costs.
In August, Morgan announced they would offer a one-time cash bonus to several
thousand support personnel at the Morgan Stanley Smith Barney brokerage to
compensate them for extra work on a difficult technology conversion. Shares
ended the session Thursday off by 4%.
The U.S. Labor Department reported on Thursday that applications for U.S.
unemployment benefits jumped 46,000 to a seasonally adjusted 388,000 in the week
of October 7-13. Initial claims from two weeks ago were revised up to 342,000
from an original reading of 339,000, based on more complete data collected at
the state level. The average of new claims over the past month, edged up by 750
to 365,500. Continuing claims, which reflect the number of people already
receiving benefits, decreased by 29,000 to a seasonally adjusted 3.25 million in
the week ended October 6. Claims had fallen two weeks ago to a four-year low,
but the decline mainly stemmed from a statistical quirk in the data that often
happens at the end of a quarter and was not reflective of a rapidly improving
labor market. Nearly 5.0 million people received some type of state or federal
benefit in the week ended September 29, down 42,664 from previous week.
The Conference Board reported on Thursday that the U.S. economy is "fluctuating
around a slow growth trend," as it reported that its Leading Economic Index rose
0.6% in September after declining a downwardly revised 0.4% during August. Prior
estimate for August pegged the decline at 0.1%. "The single biggest challenge
remains weak demand, domestically and globally," said Ken Goldstein, an
economist at the Conference Board, a New York research group. LEI is a weighted
gauge of 10 indicators designed to signal business cycle peaks and troughs. Led
by building permits, six of the 10 indicators made positive contributions during
September. New orders for manufacturers were the biggest negative contribution
to the LEI.
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