Google Earnings Snafu Adds to Tech ETFs’ Woes
October 18th at 1:28pm by John Spence
Google (NasdaqGS: GOOG) shares plunged 9% before being halted after the search engine giant accidentally reported third-quarter financial results Thursday that disappointed Wall Street.
The pullback in Google and fellow sector bellwether Apple (NasdaqGS: AAPL) was another hit to technology ETFs, which have been trailing the market since the beginning of September.
The $9.8 billion Technology Select Sector SPDR (NYSEArca: XLK) is down nearly 4% the past month, while iShares S&P 500 (NYSEArca: IVV) is flat. XLK slipped 1% on Thursday.
Google is the fifth-largest stock in the technology ETF at 6.7% of the portfolio. Apple is the biggest holding at 20.3% — the stock was down about 2% on Thursday. [Equal-Weight Tech ETFs if You’re Shy About Apple]
Apple’s recent slide after a brief rise above $700 a share has hurt other popular tech ETFs such as the Nasdaq-100 PowerShares QQQ (NasdaqGM: QQQ). [Tech ETFs See Outflows as Apple Slips]
Google’s meltdown Thursday after the earnings mishap caused more pain for tech ETF investors. The company was scheduled to release results after the closing bell, but they came out in the middle of the trading day on the SEC’s website.
In a major embarrassment for the company, its SEC filing contained a partially-written press release that was marked as “PENDING LARRY QUOTE,” referring to CEO Larry Page, the Financial Times reports.
The chart below is the relative performance of the Technology Select Sector SPDR versus the S&P 500 showing the recent underperformance.
Full disclosure: Tom Lydon’s clients own QQQ, AAPL and GOOG.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.