RealTime IT News

Stocks Get Googled

Stocks tumbled Tuesday after Google said it sees growth slowing.

According to Reuters, Google CFO George Reyes told a Merrill Lynch conference that "most of what is left is just organic growth."

"Clearly our growth rates are slowing. We see that each and every quarter," Reyes said. "We are going to have to find new ways to monetize the business."

Reyes' comments, which came two days before Google's highly anticipated analyst meeting, sent the company's shares 7% lower. The stock traded as low as $338.51 before recovering to close at $362.62.

In a research note, Merrill Lynch said Reyes' comments "seem to hint that the growth this year will be driven more by growth in traffic and increases in ad spend[ing] by advertisers."

Merrill noted that new products will become more important to Google's business mix. Google Base will soon be fully searchable, the Wall Street firm said. Wi-fi projects are just test cases for now, but a payment processing service "is a natural extension of its current payment services with Video Store and advertiser services and the Publication Ads service will see more publishers signed on," Merrill said.

Google's shares are off more than 23% from their 52-week high of $475.11; much of that decline came after the company posted disappointing results a month ago.

The broader market traded lower even before the Google news hit an hour into the trading day, as consumer sentiment, existing home sales and Midwest manufacturing reports all were weaker than expected.

The Nasdaq fell 25 to 2281, the S&P 500 lost 13 to 1280, and the Dow tumbled 104 to 10,993. Volume rose to 2.37 billion shares on the NYSE, and 2.19 billion on the Nasdaq. Decliners led 22-10 on the NYSE, and 20-10 on the Nasdaq. Downside volume was 82% on the NYSE, and 71% on the Nasdaq. New highs-new lows were 102-35 on the NYSE, and 131-41 on the Nasdaq.

Intel managed a small gain. For the first time in several years, the chip giant hasn't scheduled a mid-quarter financial update, saying the updates focused investors too much on short-term results and not enough on long-term strategy and investments. On Friday, the company will enter its quiet period until its April 19 earnings release.

Cisco closed just under a 52-week high after closing its acquisition of Scientific-Atlanta.

Apollo , Shanda and ValueClick tumbled on their results.

Bitstream soared on its results.