NEW YORK ( TheStreet) -- The major U.S. equity averages finished lower Thursday after the surprise early release of disappointing quarterly results by Google (GOOG - Get Report) threw the markets for a loop.
A midday Form 8-K filing by the Internet search giant contained an unfinished press release, including the phrase "Pending Larry Quote" referring to CEO Larry Page, as well as the company's third-quarter numbers, which fell well short of Wall Street's expectations.
Google shares, which spent much of the afternoon halted, resumed trading with about 40 minutes left in the session and closed down 8% at $695. In the aftermath of the earnings leak, company pulled together an official press release -- complete with a positive quote from Page -- and placed blame for the controversy on R.R. Donnelley (RRD), whose stock finished down less than 1%.
Regardless of where the fault lies, the actual results were very bad, adding to general investor apprehension about third-quarter earnings season, which has been at best a mixed bag. Google's non-GAAP earnings came in a $3.01 billion, or $9.03 a share, far below the average estimate of analysts polled by Thomson Reuters for a profit of $10.65 a share. Revenue excluding traffic acquisition costs came in at $11.33 billion for the quarter vs. the consensus view of $11.86 billion.Aside from the Google noise, traders also grappled with a soft read on labor market conditions and nervousness ahead of a two-day summit of European Union leaders in Brussels. The Dow Jones Industrial Average finished down 8 points, or 0.06%, at 13,549. The blue-chip index, which ranged less than 80 points during the session, snapped a four-day winning streak. Breadth within the Dow was positive with winners ahead of losers, 18 to 11, with Procter & Gamble (PG) finishing flat. The sharpest decliners among the blue chips were American Express (AXP), IBM (IBM), McDonald's (MCD) and JPMorgan (JPM). AmEx shares lost nearly 3% after the credit card company came up a bit short on the top line with its third-quarter results. The biggest percentage gainers were DuPont (DD), Johnson & Johnson (JNJ), Merck (MRK), Travelers (TRV) and Verizon (VZ). Shares of Travelers rose 3.6% after the insurance and financial services giant posted a record quarterly operating profit of $2.22 a share, blowing past the average analyst estimate of $1.61 a share, with results driven by lower catastrophe losses and higher underlying underwriting results. Verizon's stock got a 2.4% boost after the communications company reported a quarterly profit of $1.59 billion, or 56 cents a share, compared with $1.37 billion, or 49 cents a share a year earlier. Revenue came in at $29 billion, up from $27.91 billion last year. Excluding items, earnings came in at 64 cents a share. Analysts were calling for earnings of 64 cents a share in the September-ended period on revenue of $29 billion. Microsoft (MSFT - Get Report) finished slightly lower and was extending losses in after-hours trading after its fiscal first-quarter report, which showed a year-over-year decline in operating income amid slow PC demand ahead of the company's Windows 8 launch. The S&P 500 gave back nearly 4 points, or 0.24%, to close at 1457, while the Nasdaq dropped more than 31 points, or 1.01%, to settle at 3073.