Google Raises Nasdaq Index, Banks Weigh Down Dow

On Wall Street on Friday, the Dow Jones index weakened, pulled down by falling bank stock prices due to uncertainty regarding potential illegal foreclosures, while the Nasdaq index rose thanks to excellent business results from Google.

The Dow Jones index fell by 31 points, or 0.29 percent, to 11,062 points, while the S&P 500 rose by 0.20 percent to 1,176 points, and the Nasdaq index increased by 1.37 percent to 2,468 points. The star of the day was Google. The stock price of this tech leader jumped by more than 11 percent, thanks to significantly better-than-expected business results in the third quarter.

This also boosted other tech stocks, allowing the Nasdaq to outperform other major indices yesterday. Contributing to this was a strong 4.1 percent rise in Apple’s stock price, as investors hope that this tech giant will also report good quarterly results. On the other hand, the stock price of General Electric sharply fell by more than 5 percent due to weaker business results than expected. However, the operating profit of this conglomerate increased for the second consecutive quarter, but its revenues fell short.

The banking sector was also under pressure as an investigation into possible illegalities in the banks’ foreclosure practices on clients’ homes was announced the day before, which could cost them dearly if the illegalities are proven. As a result, the stock price of Bank of America fell by 4.9 percent, and Citigroup by 2.7 percent. In the last three days, the KBW bank sector index has lost 5.9 percent.

New macroeconomic data confirmed that the growth of the U.S. economy is slowing. Consumer confidence in October is lower than expected, and consumer prices have risen at a lower rate than estimated. It is becoming increasingly clear that the U.S. economy needs new stimulus measures, which was also announced yesterday by the chairman of the central U.S. bank.

High unemployment and low inflation indicate the need for further easing of monetary policy, said Ben Bernanke. Also yesterday, for the third consecutive day, trading volume was above average. On Wall Street, the American Stock Exchange, and Nasdaq, 9.9 billion shares changed hands, while the average daily turnover for the year so far has been 8.78 billion.

Meanwhile, on the NYSE, the ratio of stocks that lost value to those that gained was 3 to 2. Throughout the past week, the Dow Jones index rose by 0.5 percent, while the S&P 500 gained 0.9 percent, and the Nasdaq index increased by 2.8 percent. European markets traded cautiously yesterday. The London FTSE index fell by 0.42 percent to 5,703 points, while the Frankfurt DAX rose by 0.57 percent to 6,492 points, and the Paris CAC increased by 0.21 percent to 3,827 points. (H)