Stocks Trend Higher After Google Statement

Bulls dip their toes back in after the search giant issues a clarification.
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Stocks faced a higher open Wednesday as

Google's

(GOOG) - Get Report

first foray into spin control bore fruit.

Index futures recently showed the

S&P 500

trading 2 points above fair value, while the Nasdaq 100 was set for a 4-point climb. The 10-year Treasury bond fell 1/32 in price to yield 4.55% -- 18 basis points below the two-year note -- while the dollar rose against the yen and euro.

Late Tuesday, Google took the unusual step of issuing a public statement on its financial outlook, after a dour assessment of growth prospects from its chief financial officer sent the shares down 7% and sowed weakness in the broader market. In a press release, Google took a red pen to George Reyes' comments, particularly his statement that Google is running out of room to expand in the area of paid-search, or "monetization."

"As we have stated before, monetization improvements will continue to be a key factor in driving future revenue growth," Google said. "We still see significant opportunities to improve monetization and intend to continue to focus our efforts in this area.

"Moreover, as we have stated in our

SEC

filings, our revenue growth rate has generally declined over time and we expect that it will continue to do so as a result of the difficulty of maintaining growth rates on a percentage basis as our revenues increase to higher levels," Google said.

Reyes' original statement led to broad selling in U.S. markets, with the

Dow

, S&P 500 and

Nasdaq Composite

each losing about 1% on the day. Google's edit couldn't salvage most overseas sessions. While London's FTSE 100 was recently up 0.6% to 5823, Germany's Xetra DAX was losing 2% to 5796. In Asia, Japan's Nikkei fell 1.5% overnight to 15,964, while Hong Kong's Hang Seng lost 0.7% to 15,818.

Another catalyst Wednesday could be J.P. Morgan's bearish call on

Intel

(INTC) - Get Report

. The bank lowered its 2006 profit estimate on Intel to $1.03 a share and said "additional potential downside exists." The Thomson First Call consensus is for $1.23 a share. J.P. Morgan said channel checks point to a first-quarter sales miss.

To view David Peltier's video take on today's premarket action, click here

.

Oil firmed ahead of an Energy Department inventory update that is expected to show another build in crude stocks but declines in gasoline and distillates. The April contract was recently down 50 cents to $61.91 a barrel in electronic Nymex trading.

In earnings news,

Autodesk

(ADSK) - Get Report

rose after posting better-than-expected fourth quarter earnings and raising guidance. The software company's fourth-quarter earnings rose 26% from a year ago to $83 million, or 33 cents a share, while adjusted earnings of 37 cents a share were 2 cents above forecasts.

Poultry farmer

Pilgrim's Pride

(PPC) - Get Report

withdrew previously issued guidance for the second quarter and full year, citing weak international demand for U.S. chicken leg quarters. The company said it will update its outlook during a May 2 conference call.

Pacific Sunwear

(PSUN)

said fourth-quarter earnings rose 15% from last year to $47 million, or 63 cents a share, matching estimates on a 12% sales rise. But the shares ran into trouble when the company reported an unexpected decline in February same-store sales and issued profit guidance that trailed estimates.