Wall Street Beat: Tech stocks show some resilience

Despite an unusual earnings miss Thursday by Internet bellwether Google, continuing geopolitical turmoil and disappointing news for the PC market, IT is demonstrating continuing resilience as tech stocks in certain sectors moved higher Friday.

High energy prices and component supply disruptions caused by the tragic earthquakes in Japan have roiled corporate share values worldwide in recent months. Crude oil prices set new 30-month highs this week, with per-barrel prices jumping past US$112 Friday, largely due to concerns about political unrest in the Middle East and Africa, where pre-election violence in Nigeria threatens to disrupt supplies.

Nevertheless, the tech-heavy Nasdaq closed Friday at 2,764.65, up 4.43 for the day. Computer stocks on the exchange are still up by about 3 percent for the year. Tech, media and telecom stocks on the New York Stock Exchange are up by about 4.89 percent for the year.

Google was one big exception to the generally upward trend for tech Friday, as investors appeared to punish the company for earnings that did not live up to forecasts by industry analysts. Google shares ended up at $530.70, down by $47.81.

Even though Google's first-quarter profit rose 17 percent from last year, to $2.3 billion, earnings per share of $8.08 fell short of the $8.11 expected by analysts polled by Thomson Reuters. Greater-than-expected costs, including the hiring of almost 2,000 new employees, contained profit margins.

Apparently overlooked Friday was Google's revenue, which at $6.54 billion for the quarter exceeded analyst expectations of $6.32 billion. Arguably, sales are a better indicator of long-term growth prospects than net income. While earnings figures are essentially a function of how companies account for costs and expenses, companies cannot grow unless sales expand.