* Google drops 8 pct after surprising midday earnings
* Seven of 10 S&P 500 sectors end higher, offset tech
* Verizon and Travelers climb after results
* Dow off 0.1 pct, S&P 500 off 0.2 pct, Nasdaq down 1 pct
By Atossa Araxia Abrahamian
NEW YORK, Oct 18 (Reuters) - U.S. stocks fell on Thursday,
with technology stocks hit hard after Google disappointed
investors with earnings results that were prematurely released
during the trading day.
Google's stock dropped 8 percent - the company's worst day
since Jan. 20 - to close at $695 after the Internet giant's
third-quarter results showed earnings and revenue fell short of
forecasts. Trading of the stock was halted at 12:50 p.m. Trading
resumed at 3:20 p.m.
The slide in Google's stock after the midday surprise was
the biggest drag on the S&P 500. Tech stocks
suffered, with the S&P 500 information technology index
losing 1.53 percent. Shares of IBM, which disappointed
investors a day earlier, lost 2.8 percent to close at $194.96
and pull the Dow lower.
"It's a huge impact on the market, and especially the tech
stocks," said Paul Nolte, managing director at Dearborn Partners
in Chicago. "What happened to Google is a continuation in the
tech sector of some very poor earnings numbers. But we're not
seeing the same lack of performance across the board from other
Travelers gained 3.6 percent to $73.94 and gave the
biggest boost to the Dow after the U.S. property and casualty
insurance company posted record operating earnings.
Verizon Communications Inc rose 2.4 percent to $45.78
after the company reported a record quarterly profit. Verizon
attributed these gains to its wireless business. It also posted
revenue that slightly exceeded expectations.
Morgan Stanley reported better-than-expected adjusted
quarterly earnings on Thursday as big gains in its bond trading
business boosted its revenue. The stock fell, however, losing
3.8 percent to $17.79.
Technology was by far the day's weakest sector, but seven of
the S&P 500's 10 sectors ended the session higher.
Overall, with 19 percent of S&P 500 companies having
reported results, quarterly earnings are expected to drop 1.5
percent from a year ago - an improvement from a decline of 3
percent forecast earlier in the week, according to Thomson
After the close, Microsoft reported that its fiscal
first-quarter profit fell, hurt by a dip in computer sales
running its Windows operating system.
Microsoft's stock fell 1.2 percent after the bell. It had closed
at $29.50, down 0.3 percent in regular trading.
Philip Morris International was also scheduled to
post earnings after the bell on Thursday.
Weak jobs data released on Thursday also weighed on the
market. Weekly jobless claims rose to 388,000 - or 32,000 more
than analysts expected. A Labor Department official said it
appeared that state-level administrative issues were distorting
"On a longer-term basis and non-seasonally adjusted basis,
the jobs numbers are in line with where they're been all year.
And that's still indicative of very slowly improving
employment," Nolte said.
Shares of eBay gained 5.5 percent to $50.83 after
S&P Capital IQ raised its target price on the stock by $5 to
The Dow Jones industrial average dipped 8.06 points,
or 0.06 percent, to 13,548.94 at the close. The Standard &
Poor's 500 Index shed 3.57 points, or 0.24 percent, to
1,457.34. The Nasdaq Composite Index fell 31.26 points,
or 1.01 percent, to close at 3,072.87.
Thursday's decline snapped the S&P 500's three-day streak of
gains, when it rose 2.3 percent.
Lam Research gained 7.2 percent to $36.01 after
Piper Jaffray cut its price target on the wafer manufacturing
company's stock to $39 from $45. The brokerage has an
"overweight" rating on the stock.