Nasdaq closes at record high as Google surges

NEW YORK (AFP) - The Nasdaq closed at a record high for the second straight session Friday, jumping more than 0.9 per cent following a surge in Google shares.

The tech-rich Nasdaq Composite Index leaped 46.96 points (0.91 per cent) to 5,210.14.

The Dow Jones Industrial Average dropped 33.80 (0.19 per cent) to 18,086.45, while the broad-based S&P 500 added 2.35 (0.11 per cent) at 2,126.64.

Google powered 16.1 per cent higher after reporting that second-quarter net income climbed two percent to US$3.4 billion (S$4.6 billion) on an 11 per cent rise in revenue to US$17.7 billion, thanks in part to increases in mobile advertising.

The tech giant also gave a bullish outlook on its YouTube business and hinted that moves to return cash to shareholders were in the horizon.

The surge lifted Google’s market capitalization to above US$450 billion, second only to Apple, which is valued at US$746 billion.

The spike in the share price added about US$4 billion each to the fortunes of co-founders Larry Page and Sergey Brin.

Other tech stocks to rise included Apple (0.9 per cent) Facebook (+4.5 per cent) and Priceline (+2.8 per cent).

Among Dow companies, Boeing fell 1.1 per cent after announcing a US$536 million charge due to higher costs in its tanker program for the US Air Force.

The aerospace giant said the charge would amount to 77 cents per share, and that it would have to adjust downward its earnings outlook for the full year.

Other Dow components to fall included Chevron and Intel (both -1.4 per cent).

General Electric rose 0.7 per cent after it lifted its forecast for 2015 industrial earnings on strong orders in aviation and some other businesses.

Fertilizer company CF Industries surged 9.9 per cent after the Wall Street Journal reported it was in advanced talks for a merger deal with Dutch company OCI.

Chinese e-commerce giant Alibaba rose 2.2 per cent as the Chinese stock market continued to rally. Yahoo, which holds a large stake in Alibaba, added 2 per cent.

Car-rental company Hertz surged 11.9 per cent after it announced a US$1 billion share repurchase programme and said it would achieve US$300 million in annualised cost savings by the end of 2015. The company also finished restating earnings for 2011-2013.

Bond prices were mixed. The yield on the 10-year US Treasury held steady at 2.35 per cent, while the 30-year dropped to 3.08 per cent from 3.15 per cent. Bond prices and yields move inversely.