Last updated: February 7, 2013 10:12 pm

Earnings disappointments leave Wall St lower

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Shares in Akamai Technologies tumbled after the leading cloud platform’s quarterly revenues and forecast missed analysts’ estimates. The company’s stock fell 15.2 per cent lower to $35.26.

Analysts at Piper Jaffray, while disappointed with the earnings, remained confident in the company’s longer-term potential for improving growth and found a silver lining in the sharp drop in the shares.

“Historically, a significant move lower in Akamai shares following a disappointing quarter or guide has proven to be a buying opportunity as investor confidence returns within one to two quarters.”

Overall, US equities moved sharply lower, dropping below 1,500 mark but pared some of the losses as investors digested a batch of corporate earnings and economic data.

Weekly jobless claims fell and the longer four-week moving average moved to a near five-year low, although analysts were expecting slightly sharper falls.

Other data showed a sharp drop in productivity in the fourth quarter due to weak economic activity.

The S&P 500 index finished 0.2 per cent to 1,509.39. The Nasdaq Composite index slipped 0.1 per cent to 3,165.13 while the Dow Jones Industrial Average shed 0.3 per cent to 13,944.05.

“The markets moved lower because the jobless claims were not great, just like the rest of recent economic data,” said Uri Landesman, president of Platinum Partners, an investment management group.

“At current levels, the S&P 500 is very high, so day-to-day volatility is natural – but we believe it still has the potential to reach record levels in the first half of the year,” he added.

LinkedIn shares, which finsihed the day lower, jumped in the extended hours trading, after fourth-quarter earnings beat estimates by a wide margin. The professional social network’s revenues rose 81 per cent after its membership swelled. Shares were 8.1 per cent higher to $134.50 in after-hours trading.

KKR reported a 22 per cent rise in profits in the fourth quarter and registered its most profitable year since going public.

However, shares closed 0.3 per cent lower to $17.72, possibly because the earnings results were already priced in. The share price in the group had risen to its highest level in 18 months, gaining more than 50 per cent in the past six months.

Shares in Lazard , an independent investment bank, rose after quarterly earnings beat Wall Street’s expectations.

Revenues from advising on mergers at the world’s largest independent investment bank jumped 40 per cent in the final three quarters of last year, as global volumes for M&A activity reached the highest levels since 2008. Lazard shares rose 2.4 per cent to $37.55.

Shares in Sprint Nextel fell after the mobile telecoms operator disappointed investors with lower-than-expected fourth-quarter results.

The company reported a net loss of $1.32bn, mainly reflecting the continuing costs of shutting down the costly Nextel network. The stock fell 0.5 per cent to $5.74.

Shares in Apple dipped in and out of negative territory for the most of the trading session after the news that David Einhorn’s Greenlight Capital has sued the iPhone maker over proposed changes to its corporate charter. The fund had been putting pressure on Apple to return more cash to its shareholders.

Apple issued a statement in the last half-hour of trading session, saying it will return $45bn to shareholders over three years. Shares jumped and closed 3 per cent higher at $468.25 on the news. The jump in the company, which is the heaviest weighted in both the S&P 500 and Nasdaq Composite added 3 and 15 points to the indices respectively.

O’Reilly Automotive was the best performer on the S&P 500 index, rallying 8 per cent to $100.04. The after-market auto parts retailer reported record quarterly revenues and earnings on Wednesday, after the market close, beating consensus estimates.

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