Microsoft, Google Beat the Street

Microsoft and Google reported better than expected quarterly results late Thursday, while AMD issued the latest disappointing results from the chip sector.

Microsoft shares surged 5% in late trading after the software giant beat Wall Street estimates on both the top and bottom lines. Microsoft’s earnings of 31 cents a share beat estimates by a penny, and sales rose 16% to $10.8 billion, topping $10.63 billion forecasts.

Microsoft’s September quarter sales guidance of $10.6-$10.8 billion was below $10.97 billion forecasts, but the company raised full-year sales and revenue guidance. Microsoft also announced a $20 billion tender offer over the next month and a $20 billion five-year buyback.

Microsoft cited strong Xbox, SQL Server, Visual Studio and Dynamics CRM sales for the strong results.

Google shares edged higher after the search king posted earnings of $2.49 a share, 28 cents ahead of forecasts. Revenue after traffic acquisition costs surged 87% to $1.67 billion, beating $1.64 billion estimates. Analysts might have been looking for stronger domestic sales, but that was the only nit in an otherwise solid report.

AMD, meanwhile, saw its shares slide 6% after the company missed on both the top and bottom line. Revenues of $1.22 billion were pretty much in line with where the company warned they would be earlier this month, the results of a price war with Intel .

A 7.5% decline in shares of Intel on the chip giant’s dismal results was one of the biggest factors weighing on the market Thursday, as the Nasdaq gave up all its gains and then some from Wednesday’s big rally. Slowdown fears also weighed on the broader market.

Apple and Motorola were standouts after delivering better than expected results, while eBay , Qualcomm and Novellus fell on their results.

Also gaining on earnings reports were Nokia , Avici and Amdocs . Citrix , Fairchild , Intersil , Lam Research and Openwave fell on their reports.

The Nasdaq fell 41 to 2039, the S&P 500 lost 10 to 1249, and the Dow fell 83 to 10,928. Volume declined to 2.35 billion shares on the NYSE, and 2.12 billion on the Nasdaq. Decliners led 22-10 on the NYSE, and 22-7 on the Nasdaq. Downside volume was 73% on the NYSE, and 81% on the Nasdaq. New highs-new lows were 67-83 on the NYSE, and 54-129 on the Nasdaq.