Technology Shares Soar After Google’s Blowout Earnings
Stocks in the US started the trading session on a strong note, but the Dow Industrials continue to be weighed down by IBM (NYSE:IBM) and Microsoft (NASDAQ:MSFT) . The Nasdaq received a boost out of the gates after Google (NASDAQ:GOOG) notched up strong earnings pushing the search giant above $1,000 per share for the first time in its history. Investors received information from government department about releases for September which are now scheduled for the weeks ahead. The S&P 500 notched up a new all-time high again on Friday.
Earnings results throughout the week were mixed, but Google and Morgan Stanley hit the cover off the ball Friday which pushed Google’s stocks price above 1,000 per share for the first time in its history. Google’s shares climbed more than 12% after the search giant’s third quarter earnings topped consensus. Net profit rose 36% to $2.97 billion, adjusted earnings per share was $2.18 billion and revenue climbed 12% to $14.89 billion.
With the debt crisis in the rearview mirror until February of 2014, investors will likely focus their attention on the Federal Reserve, as the confirming of Janet Yellen will keep that status quo and bond purchase likely to remain steady until after the resolution of the February 2014 debt ceiling debate.
Google pushed the Nasdaq 100 higher gapping on the open and continuing to push to multi-year highs. Momentum on the technology index is strong with the MACD (moving average convergence divergence) index generating a buy signal mid-week as the spread (the 12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread. Additionally, the index moved from negative to positive territory confirming the buy signal.
Investors should be cautious as the RSI (relative strength index) climbed up to the 68 level which is on the upper end of the neutral range, but still slight below the overbought trigger level of 70 that could foreshadow a correction.
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