Stocks wobble after Amex earnings, jobless claims

Friday, October 12, 2012, Vol. 36, No. 41
The Associated Press

NEW YORK (AP) — A mixed batch of earnings and economic reports kept the stock market wavering between small gains and losses Thursday. Google plunged nearly 10 percent after releasing a weak earnings report hours ahead of schedule.

The Dow was up two points to 13,561 at 1 p.m. It was down for most of the morning. The Standard & Poor's 500 index slipped one point to 1,459.

"This is a market that's waiting for a clear catalyst," said Quincy Krosby, market strategist at Prudential Financial. What investors most want, she said, is a sense of direction. They hope companies will lay out clearly where earnings and the economy are headed.

"We basically know what happened in the last quarter," Krosby said. "What we're looking for is what's next: Are we turning a corner? Will demand pick up at the end of the year?"

Google's stock dropped $68.19 to $687.30 before being halted. The company's earnings, which fell far short of analysts' forecasts, were supposed to be released after the close of trading.

Google's fall helped tug the Nasdaq composite down 23 points to 3,080.

American Express sank 2.4 percent, the biggest loss of any Dow stock. The credit-card company reported quarterly revenue late Wednesday that fell short of Wall Street's expectations even though earnings were in line. Amex said card holders' rate of spending has slowed in recent months. Its stock lost $1.43 to $57.94.

Strong profits for the insurer Travelers sent its stock up 4 percent. The company said Thursday that claims from catastrophes plunged compared to the same quarter last year, which helped earnings double. Travelers' stock gained $2.78 to $74.16.

BB&T bank, Philip Morris International and Boston Scientific all fell after reporting results that fell short of analysts' forecasts. Microsoft is scheduled to post earnings after the market closes.

Analysts expect S&P 500 companies to say that overall earnings shrank in the third quarter, according to S&P Capital IQ. That would be the first drop in exactly three years.

Weekly applications for unemployment benefits surged to a four-month high, a sharp rise from the previous week. The increase suggested rising layoffs, but the Labor Department pointed to technical reasons behind the swing, mainly delayed figures from one large state, California.

Better earnings from Johnson & Johnson and other companies, along with encouraging reports on industrial production and the housing market, have pushed the stock market higher this week. The Dow is up 1.9 percent and the S&P 500 index up 2.5 percent for the week.

In other trading, yields on U.S. government bonds fell following the jump in weekly claims for unemployment benefits. The yield on the 10-year Treasury note dipped to 1.81 percent from 1.82 percent late Wednesday.

Traders typically shift money into Treasurys on signs of weakness in the economy. When bond prices rise, their yields fall.

Among other stocks making big moves:

— EBay jumped $2.38 to $50.58 after posting better net income and sales late Wednesday, thanks to more revenue from its PayPal payments service and its online markets. The company also raised its full-year estimates for earnings and sales.

— Verizon Communications surged $1.61 to $46.33. The company said its wireless division, partially owned by Vodafone Group, signed up more customers in the quarter. Verizon said its customers also added more devices to its Share Everything plan.