After five straight losing sessions, the Dow is on a two-day winning streak including a sizable gain today. Here's how the major indexes did.
Dow Jones Industrial Average
On the global economic front, there were apparently some rumors in the market for stronger-than-previously expected growth figures out of China (reporting well after market close at 10 p.m. ET). And European bond yields fell a bit.
But what I prefer to look at are the individual earnings reports coming out as we kick into earnings season this week. So far, so good. Alcoa started us off on Tuesday with a positive surprise. Hewlett-Packard
Google slightly missed on the top line ($8.1 billion versus an expected $8.2 billion) but beat on the bottom line ($10.08 per share versus $9.65, both on an adjusted basis). It saw increased volume growth of 39% in its advertising cash cow but at a 12% lower cost per click. There is debate on whether this is a sign of weakness or merely a mix shift.
That said, Google's earnings were overshadowed by its announcement of an unorthodox 2:1 stock split. The mechanism is a stock dividend that will issue non-voting shares, so that Google's founders can maintain control as they currently do under a dual-class structure. Basically, the non-voting shares will allow Google to stave off "dilution from routine equity-based employee compensation and other possible dilution, such as stock-based acquisitions."Cynics will say this move is a corporate governance no-no. Believers in the long-term vision of Larry Page and Sergey Brin may argue that it allows them to maintain their long-term strategies for the company.
Google's earnings did not disappoint, but will Apple's? We preview what to look for from Apple and four other must-watch companies in "5 Stocks Investors Need to Watch This Earnings Season." Get access now.
Anand Chokkavelu owns shares of Apple. The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services have recommended buying shares of Google and Apple and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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