Amazon Beats Earnings Estimates, But Misses Revenue Number

Shares of Amazon.com fell after hours on Wednesday after the online retailer beat earnings estimates but reported revenues that were beneath most analysts' forecasts. InfoSpace reported that it is buying Go2Net, and VeriSign reported a surprise profit.

Stocks traded lower during the day, as investors remained unimpressed by even better than expected earnings reports. The ISDEX fell 12 to 771, but well above its intraday low of 749. The Nasdaq lost 41 to 3987, but up 80 points from its low for the day. The Dow and S&P 500 ended at their lows of the day, the final drop coming on index rebalancing as JDS Uniphase was added to the S&P 500. The S&P dropped 22 to 1452, and the Dow lost 183 to close at 10,516. Volume rose to 1.17 billion shares on the NYSE and 1.66 billion on the Nasdaq. Chip stocks were down 6%. Decliners led by 14 to 13 on the NYSE and 23 to 15 on the Nasdaq. The major economic reports for the week are the second-quarter Employment Cost Index tomorrow and the GDP on Friday. For earnings reports, visit our earnings calendar and reported earnings.

Amazon.com fell 2 to 35 5/8 in regular trading and fell another $2 after hours after reporting a second-quarter loss of 33 cents a share, 2 cents better than estimates. But revenues came in at $578 million, below estimates of $585 million. Analysts got in on the action even before the earnings came out. Lehman Brothers downgraded the stock from Buy to Neutral during the day, citing softness in key consumer metrics, substantial execution risks, and expensive valuation.

InfoSpace announced that it is buying Go2Net for 1.82 shares for each share of GNET, valuing profitable GNET at about $87 a share based on Wednesday's closing prices. InfoSpace also announced a second-quarter loss of 1 cent per share, a nickel better than estimates. Go2Net fell 1 9/16 to 60 9/16 in regular trading, and InfoSpace gained 1 7/16 to 47 3/4. InfoSpace fell to 40 after hours, and Go2Net rose to 68.