The Dow Takes a Breather After a 4-Day Run and Google's Confusing Share Split Doubles its Gains

American markets seem a little tuckered out after four straight days of gains. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) and the S&P 500 (SNPINDEX: ^GSPC  ) both fell into the red before 11 a.m. EDT, but have so far stabilized at very narrow losses of roughly 0.1% and 0.2%, respectively.

Investors might have expected such a reaction after yesterday's barely there gains, but today's economic updates were worth nothing more than an apathetic shoulder shrug. The U.S. trade deficit in February was deeper than expected. Last week's initial jobless claims were higher than expected. The European Central Bank talked about quantitative easing, but didn't actually implement the policy. Since little has changed between yesterday and today, few of either index's components have made any significant moves.

Heading into lunchtime, Intel (NASDAQ: INTC  ) was the only Dow component with a gain of more than 1%, while the largest moves in the S&P 500 were a 3.6% gain for Newfield Exploration and a 5% decline in E*Trade. However, the biggest driver of the S&P's moderation was neither of these stocks -- Google (NASDAQ: GOOG  ) (NASDAQ: GOOGL  )  was up 2.6% heading into noon as investors reacted positively to the search giant's confusing share split.

Intel's Dow-leading 2% gain came on the heels of a Piper Jaffray analyst upgrade -- the firm now has a $30 price target to go with a buy recommendation, implying a further 14% upside from the stock's price as of noon today. The world's largest chipmaker is so heavily followed, and its business efforts so well known, that major analyst changes are relatively rare, but Piper Jaffray's Ruben Roy now evidently sees more reasons for optimism regarding Intel's mobile-chip efforts. Newfield Exploration was also the beneficiary of an analyst upgrade, as UBS raised its rating to buy and its price target to $37 per share, implying an additional 14% upside from the price at noon. 

Source: Joi Ito via Wikimedia Commons.

Google's unusual share split, which resulted in two classes of shares trading at about $582 each after today's rise, created a third class with no voting rights. Previously, Google's Class A shares were the only ones held by the public, but these were far outvoted by the B shares held primarily by founders Larry Page and Sergey Brin. Each B share gave its holder 10 votes to one vote per A share. Now, however, a new C class -- split off from the A shares but trading under the familiar GOOG ticker -- will provide holders with no voting rights at all, while the new GOOGL-tickered shares will retain the one-vote rights of the old A shares. Both shares have gained roughly the same amount (about 2.6%) as of noon today.

Since Page and Brin collectively hold about 56% of Google's voting rights, Class A shareholders already had no real voting rights to speak of, but investors may wind up pushing the value of GOOGL shares higher than the vote-less GOOG shares. Heading into noon, the difference was minimal, but it's still only a few hours into this confusing move. If GOOGL shares diverge and rise, Google might wind up paying out as much as $7.5 billion in reimbursements for holders of the vote-less GOOG shares.

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