NEW YORK – U.S. stocks fell on Thursday, with tech stocks hit hard after Google surprisingly released earnings during the trading day that showed revenue and earnings fell short of forecasts.
The unexpected news hit Google's stock hard, dropping it more than 10 percent before the shares were halted pending additional news from the technology giant. The Nasdaq was pulled lower and it was also the biggest drag on the S&P 500.
Google Inc shares were down 9 percent at $687.30 - which would be its worst one-day drop in four years. The stock was still halted at 2:35 p.m.
"Everyone is waiting to see what happens when the stock reopens,"said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas. "The goal here is to have the majority of the news that could impact volatility be released before the stock is reopened to reduce as much of that volatility as possible.
"There's no question there will be a lot of volatility when the stock reopens."
Google's stock was set to resume trading at 3:20 p.m.
The declines in the Dow and the S&P 500 were tempered by positive earnings from Verizon Communications and Travelers Companies .
Travelers gained 3.8 percent to $74.10 and gave the biggest boost to the Dow after the property and casualty insurance company posted record operating earnings, largely the result of rising insurance premiums and limited losses from natural disasters, according to the company.
Verizon Communications Inc rose 2.2 percent to $45.70. On Wednesday, the U.S. telecommunications company reported a record quarterly profit, which it attributed to its wireless business, and revenue that slightly exceeded expectations.
In the financial sector, Morgan Stanley posted better-than-expected adjusted quarterly earnings on a jump in revenue from its bond trading business. Morgan Stanley's stock, however, slid 3.3 percent to $17.88. That loss was in sync with a pattern over the past few days when shares of rivals Goldman Sachs and JPMorgan Chase & Co also fell after the banking companies reported results that exceeded Wall Street's forecasts.
Weekly jobless claims released earlier on Thursday 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 the data.
The Dow Jones industrial average fell 31.37 points, or 0.23 percent, to 13,525.63. The Standard & Poor's 500 Index shed 6.07 points, or 0.42 percent, at 1,454.84. The Nasdaq Composite Index lost 36.05 points, or 1.16 percent, to 3,068.07.
According to Thomson Reuters data through Thursday morning with 19 percent of S&P 500 companies having reported results, 64.9 percent have beaten analysts' expectations. The average since 2002 has been a beat rate of 62 percent.
Quarterly earnings are expected to drop 1.5 percent from a year ago, an improvement from the forecast earlier in the week calling for a decline of 2.3 percent.
(Reporting by Atossa Abrahamian; Editing by Jan Paschal)