Yahoo Begins Earnings Season With A Thud

Yahoo got earnings season off to an uninspiring start Thursday, falling 8% and dragging the market lower after merely meeting estimates.

With a triple-digit year-to-date percentage gain and a triple-digit price-to-earnings ratio, investors were hoping for signs of a stronger recovery from Yahoo. Yahoo did beat revenue estimates, but earnings and guidance only matched estimates.

Make a note of it: “whisper numbers” are back. After three years of lowered expectations, the late 1990s notion that published analyst estimates are meant to be beaten handily has returned.

The Nasdaq fell 31 to 1715, the S&P 500 dropped 13 to 988, and the Dow lost 120 to 9036. Volume declined to 1.44 billion shares on the NYSE, and 1.73 billion on the Nasdaq. Decliners led 23-9 on the NYSE, and 21-10 on the Nasdaq. Downside volume was 82% on the NYSE, and 82% on the Nasdaq. New highs-new lows were 122-7 on the NYSE, and 219-7 on the Nasdaq.

After the close, Juniper and Sonus beat estimates, but Powerwave missed. Juniper fell after hours despite raising guidance.

During the day, Rambus rose 4% on another favorable court ruling and a DRAM deal.

J2 Global gained 2% on news that it will be added to the S&P SmallCap 600 index after the close next Tuesday.

Cisco , off 2.6%, defended employee stock options.

Microsoft , down 2%, gained another open-source competitor.

CDW climbed 1.4% on better than expected sales.

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