Google’s third-quarter revenue grew 20 percent, slightly below Wall Street expectations, as growth slowed in the Internet company’s total number of money-making ads and expenses increased.
Shares of Google were down 2.7 percent at $510.11 in extended trading on Thursday.
Google posted $16.52 billion in revenue for the three months ended Sept. 30, compared with $13.75 billion in the year-ago period. Analysts polled by Thomson Reuters I/B/E/S were looking for revenue of $16.57 billion in the latest quarter.
Google’s total number of ads, or paid clicks, expanded by 17 percent year-over-year in the third quarter. That was down from the 25 percent growth rate that Google delivered in the second quarter.
Google’s online advertising rates, which have been in a multi-year decline, moderated slightly in the third quarter, declining 2 percent year-over-year, compared to the 6 percent decline posted in the second quarter.
Average U.S. mortgage rates tumbled this week. The 30-year loan hit its lowest level since June 2013 as Treasury bond yields marked new lows amid concern over global economic weakness.
It was the fourth straight week of declines for mortgage rates, making it more affordable to borrow to buy a home.
Mortgage company Freddie Mac said Thursday that the nationwide average for a 30-year loan dipped to 3.97 percent from 4.12 percent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, fell to 3.18 percent from 3.30 percent.
Mortgage rates often follow the yield on the 10-year Treasury note. The 10-year note traded at 2.13 percent Wednesday, down from 2.34 percent a week earlier. It traded at 2.11 percent Thursday morning. Bond yields rise when bond prices fall.
Treasury yields have dropped sharply on expectations that the world’s economic sluggishness could force the Federal Reserve to delay interest rate increases.
— Associated Press
● Goldman Sachs Group Inc. reported a 50 percent jump in quarterly profit as last month’s pickup in bond market activity helped to boost trading revenue, showing that banks that stick with the notoriously volatile business can reap big rewards. Goldman’s fixed-income, currency and commodities business, which once contributed about 40 percent of its revenue, has been on a declining trend since 2009 as new rules discourage banks from trading on their own account. Several big banks have scaled back their trading operations or quit the business altogether amid doubts about whether the industry will ever truly rebound. But that has left Goldman and a few other banks, including JPMorgan Chase & Co, to pick up clients and take advantage of periods of market volatility. Goldman’s revenue from bond trading soared 74 percent to $2.17 billion in the third quarter .
● The S&P 500 and Nasdaq eked out slight gains on Thursday after another choppy session, as economic data eased fears about the potential effect of a weakening global economy on the United States. The Dow closed down for the sixth straight session, matching a six-day losing streak in August of last year and leaving the index down 2.8 percent for the year . Providing some support to the market, St. Louis Federal Reserve Bank President James Bullard said the U.S. central bank may want to keep up its bond buying stimulus given a drop in inflation expectations. The S&P 500 again closed below its 200-day moving average of around 1,905. The Dow Jones industrial average fell 24.5 points, or 0.15 percent, to 16,117.24; the S&P 500 gained 0.27 points, or 0.01 percent, to 1,862.76; and the Nasdaq Composite added 2.07 points, or 0.05 percent, to 4,217.39.
● A firm accused of fraud will pay a $1 million penalty in what federal regulators say is the first case of market manipulation brought against a high-speed trading firm. The Securities and Exchange Commission also censured Athena Capital Research, which it said used a trading algorithm code-named “Gravy” in 2009 to manipulate the closing prices of thousands of stocks on the Nasdaq market. Athena placed a large number of rapid trades in the final two seconds of nearly every trading day over six months, the SEC said Thursday. New York-based Athena neither admitted nor denied the allegations under the settlement with the SEC, but it did agree to refrain from future violations.
● ● Initial jobless claims fell sharply last week to their lowest level in 14 years as the labor market continued to show signs of improvement despite global economic problems. The number of people filing for first-time unemployment benefits dropped to 264,000, down 23,000 from the previous week’s revised figure, the Labor Department said Thursday. Last week’s number of claims beat the previous post-Great Recession low of 279,000, reached in July.
● Tesla Motors Inc. would be blocked from selling its electric cars in Michigan under legislation that cleared the state’s legislature and now awaits Gov. Rick Snyder’s signature to become law. Elon Musk, Tesla’s co-founder and chief executive, has said the unique nature of the company’s cars means that they are best sold by the company, rather than through franchised dealers. Tesla operates its own showrooms, or galleries, and takes orders over the Internet. That approach undermines how franchisees have sold vehicles for decades, dealers have said. Tesla also butted heads with dealer groups in Georgia, Missouri, New Jersey, New York, Ohio and Pennsylvania before reaching compromises
— From news services
● 8:30 a.m.: Housing starts released.
● 8:35 a.m.: Federal Reserve Chair Janet Yellen speaks at Boston Fed conference on income inequality.
● 9:55 a.m.: Consumer sentiment
● Earnings: American Airlines, Bank of New York Mellon, General Electric, Honeywell, Morgan Stanley, Overstock.com