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Pre-Market: Google Earnings Disappoint Investors; Jobless Claims Remain Low


Four-way talks between the US, EU, Russia, and Ukraine begin in Geneva.

Stock futures pointed to a higher open on Thursday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.06% to 16,341. Futures on the S&P 500 (INDEXSP:.INX) were up 0.13% to 1,855.20. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.32% to 3,512.75.


Google (NASDAQ:GOOG) reported earnings after yesterday's close, which fell below analyst expectations despite the company posting 19% growth in revenue. Ad clicks rose while cost per click fell, and Google indicated ad clicks on mobile phones will eventually be more of a money maker than those on desktops. Shares of Google fell 2.31% in pre-market trading.

Forbes contributor Robert Hof dug deeper into Google results in a recent article:

Some analysts said the quarter indicated that profits will be pressured increasingly as Google expands its ad business further beyond search. "The company's revenue mix has shifted from the high margin self-service paid search business the company started with towards fuller service display advertising and ad tech a well as online video," Pivotal Research Group analyst Brian Wieser said in a note to clients....

Earnings season moved ahead this morning, with soft-drink maker PepsiCo (NYSE:PEP) reporting a 13% rise in quarterly profits as snack sales in North America grew. Net income of $1.22 billion was higher than $1.08 billion a year ago. Shares of PepsiCo traded up 2.28% before the opening bell.

Goldman Sachs (NYSE:GS) beat analyst estimates despite an 11% drop in Q1 profits as net income fell to $1.95 billion from $2.19 billion in the same quarter last year. The decline was led by lower client activity and shrinking fixed income revenue. Goldman Sachs was trading up 1.88% in the pre-market session.

Among other companies reporting earnings this morning, General Electric (NYSE:GE) delivered better than expected earnings; Chipotle (NYSE:CMG) reported lower margins and expects to open 180 to 195 new restaurants in 2014; and Morgan Stanley (NYSE:MS) beat analyst expectations with a jump in profits on higher fixed income earnings.

The Economy

Federal Reserve Chairperson Janet Yellen said she expects interest rates to remain very low despite signs that the US economy is gaining strength. Among these indicators is US consumer spending, for which the Fed's latest Beige Book showed increases in most regions of the country over the past six weeks.

Today, initial jobless claims ticked up slightly to a seasonally adjusted 302,000 -- remaining near their lowest level since 2007. At 9:45 a.m., Bloomberg will release its Consumer Comfort Index. The Philadelphia Fed will release its Business Outlook Survey at 10:00 a.m. The EIA Natural Gas Inventory arrives at 10:30 a.m. Both the Fed balance sheet and the money supply will be released after the closing bell at 4:30 p.m.

Global Markets

Asian markets move higher for a second day following positive industrial production data in the US. In China, the Commerce Ministry said the country's economy is doing better than recent data suggests, which showed Chinese growth at a six-month low. Among the optimism was the belief that China would meet its exports-imports target. Japan downgraded its economic outlook for the first time since November 2012, as a recent tax hike is believed to have cut consumer spending.

In Europe stocks moved lower, led by SAP AG (NYSE:SAP) posting weak earnings and sales. Meanwhile, European car sales extended their recovery into March, with new car registrations rising 11%. In Geneva, four-way talks between the Ukraine, Russia, the EU, and the US began as Germany considered tougher sanctions against Russia.

Twitter: @brokawbrokaw
No positions in stocks mentioned.
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