Yahoo Posts Strong Quarter

Yahoo posted strong results after the bell on Wednesday, but investors apparently were looking for more.

Earnings of 8 cents a share matched analysts’ estimates, and revenues of $321.4 million beat estimates of $313-320 million. But Yahoo merely reaffirmed guidance instead of raising it as investors had hoped. The company said it sees third-quarter revenues of $318-338 million, versus consensus estimates of $325.5 million. For the full year, Yahoo said it expects revenues to come in between $1.26-1.31 billion versus estimates of $1.28 billion.

Investors were looking for much better after Yahoo’s 115% gain this year and lofty valuation. The stock fell 5% after hours from its 4 p.m. close.

During the day, the Nasdaq eeked out a small gain on a report that Cisco CEO John Chambers said he sees an IT spending pickup – but Cisco later said the report was erroneous. Chambers simply said that spending will improve 2-4 months after business picks up. The Dow and S&P fell on Altria’s legal troubles and worries about GE’s earnings due out Friday morning.

The Nasdaq tacked on 1 to 1747, the S&P 500 fell 5 to 1002, and the Dow lost 66 to 9156. Volume rose to 1.57 billion shares on the NYSE, and 2.15 billion on the Nasdaq. Decliners led 17-14 on the NYSE, but advancers led 18-13 on the Nasdaq. Downside volume was 51% on the NYSE, and 35% on the Nasdaq. New highs-new lows were 270-7 on the NYSE, and 424-4 on the Nasdaq.

Microsoft slipped 0.8% after announcing that it is replacing its stock option program with stock grants. The rest of the tech industry doesn’t seem to be in a hurry to expense stock options.

GRIC soared 58% on AT&T’s Wi-Fi plans.

24/7 Media surged 40% despite an adverse patent ruling.

Looksmart gained 11% on a deal with Lycos.

McData fell 13% on negative analyst comments.

Logitech plunged 24% on a warning.

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