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Plunge in consumer confidence sends stocks lower

In this Aug. 29, 2011 photo, traders work on the floor of the New York Stock Exchange Monday, Aug. 29, 2011. European stocks were hurt Tuesday, Aug. 30, by a report showing economic sentiment in the eurozone was souring due to uncertainties about the future of the global economic recovery and the region’s festering debt crisis. (AP Photo/Richard Drew)

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News Summary: Google’s 1Q earnings top Street view

MOBILE EVOLUTION: Google’s first-quarter earnings rose 16 percent to $ 3.3 billion as the Internet search leader made further progress in its effort to boost the prices for ads distributed to smartphones and tablet computers. That helped lift Google’s earnings above analyst projections.

THE CHALLENGE: Marketers haven’t been willing to pay as much for ads on mobiles devices because their display screens are smaller than those on personal computers. But Google’s first-quarter numbers indicated the gap between mobile and PC ads is gradually narrowing.

OTHER POSITIVES: The losses in the Motorola Mobility division that Google bought last year for $ 12.4 billion are easing.


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News Summary: Capital One posts lower 1Q profit

THE BOTTOM LINE: Capital One Financial’s first-quarter net income fell 25 percent versus the prior-year quarter, when the lender booked a hefty gain related to the addition of online bank ING Direct.

THE NUMBERS: Net income fell to $ 1.05 billion, or $ 1.79 per share, for the three months ended in March. That compares with net income of $ 1.4 billion, or $ 2.72 per share, a year earlier. Revenue grew 13 percent to $ 5.55 billion.

MIXED RESULTS: Analysts polled by FactSet expected earnings of $ 1.61 per share. But Capital One’s revenue fell short of analysts’ prediction of $ 5.57 billion.


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News Summary: Morgan Stanley, tale of 2 bank units

TALE OF TWO BANK UNITS: Morgan Stanley’s first-quarter earnings and revenue slipped. Though they beat analysts’ expectations, investors were disappointed and drove down the bank’s stock price. Profit and revenue fell in the investment bank but jumped in wealth management. The bank is rejiggering its strategy to focus more on the latter.

THE INVESTMENT BANK: Brought in less revenue from trading bonds and commodities, and made less money on advising companies on mergers and acquisitions. Revenue from underwriting stock and bond offerings rose.

WEALTH MANAGEMENT: Generated more fees, and clients brought more assets to the bank. The pre-tax profit margin rose to its highest level since Morgan Stanley’s wealth management group joined with Citigroup’s Smith Barney in 2009.


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News Summary: American Express’ 1Q profit up

EARNINGS DOWN: American Express’ net income rose 2 percent in the first quarter, as cardholders spent more, boosting revenue. The latest earnings came ahead of Wall Street expectations, but revenue fell short.

THE NUMBERS: For the three months ended March 31, net income totaled $ 1.28 billion, or $ 1.15 per share. That compares with net income of $ 1.25 billion, or $ 1.07 per share, in the same period last year. Revenue in the latest quarter grew 4 percent to $ 7.88 billion.

SPENDING UP: Spending by American Express cardholders rose 6 percent.


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