Nasdaq falls 1 percent after weak Google results


Stocks fell on Thursday, with the Nasdaq dropping 1 percent, as Google shares slumped after the company reported revenue and earnings below analysts' expectations.

Google Inc shares fell 8.9 percent to $687.92 before the stock was halted and after the company unexpectedly reported its third-quarter earnings early.

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The Internet search company was the biggest drag on both the S&P 500 and Nasdaq indexes.

"Mistake or not, the earnings are earnings. The problem is when this happens in the middle of the day, there is no time for a conference call to massage it. There is no time for analysts' questions and for an evaluation," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"Now you shoot first and ask questions later."

But losses were lower on the S&P 500 and Dow, which were helped by positive earnings from Verizon and Travelers Companies . Google is not one of the Dow Industrial's 30 components.

Verizon Communications Inc reported revenue that slightly exceeded expectations while U.S. property and casualty insurer Travelers Cos posted record operating earnings that were much stronger than expected.

Travelers gained 3.6 percent to $73.98 as the biggest boost to the Dow. Verizon rose 2.8 percent to $45.97. The S&P telecom sector index , up 1.9 percent, was the best performer among the S&P 500's 10 major sectors.

"Third-quarter earnings are not spectacular, that's for sure. But the bar is so low that as long as the businesses aren't falling apart, the earnings aren't collapsing," said Doug Foreman, director of equities at Kayne Anderson Rudnick Investment Management in Los Angeles.

The Dow Jones industrial average dropped 11.13 points, or 0.08 percent, to 13,545.87. The Standard & Poor's 500 Index lost 4.39 points, or 0.30 percent, to 1,456.52. The Nasdaq Composite Index fell 31.98 points, or 1.03 percent, to 3,072.14.

Weekly jobless claims rose much more than expected in the latest week to 388,000, coming off an unexpectedly sharp decline in the previous week. Analysts had expected claims to rise to 365,000, though a Labor Department official said it appeared state-level administrative issues were distorting the data.

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 Chuck Mikolajczak; Editing by Kenneth Barry)