Before the Bell: Google Holds History’s Most Expensive Press Event While Twitter Burns

Premarket action on Thursday had the three major U.S. indexes trading higher. The Dow Jones industrials were up 0.63%, the S&P 500 up 0.74% and the Nasdaq 1.12% higher.

All 11 market sectors closed lower Wednesday, with communications services (−4.13%) and utilities (−1.71%) posting the day’s largest losses. Real estate (−0.29) and health care (−0.31%) gave up the least. The Dow closed 0.61% lower, the S&P 500 down 1.11% and the Nasdaq down 1.68%. Two-year Treasuries dropped two basis points to close at 4.45%, and 10-year notes dipped by four basis points to 3.63%. Oil gained 1.3% and traded up by about 0.2% early Thursday morning at $78.77.

Wednesday’s trading volume was well below the five-day average. New York Stock Exchange losers led winners by 2,045 to 1,009, while Nasdaq advancers led decliners by about 2 to 1.

The weekly report on claims for unemployment benefits will be released before markets open Thursday morning. Economists estimate that 194,000 new claims were filed last week, up from 183,000 filed a week earlier. Continuing claims, which lag by a week, totaled 1.655 million in the week ending January 21, down by 11,000 from the prior week.

The University of Michigan consumer sentiment index is due out on Friday.

Among S&P 500 stocks, Fortinet Inc. (NASDAQ: FTNT) added 10.9% on Wednesday after hammering earnings estimates. The cybersecurity company reported earnings per share were up 76% year over year and revenue increased by 33%. First-quarter guidance was better than expected, too.

Lumen Technologies Inc. (NASDAQ: LUMN) plunged by 20.84% following a dismal earnings report and weak guidance. Absent its former high dividend, which the company last paid in August 2022, Lumen’s stock has fallen by nearly two-thirds.

The award for most expensive product introduction of all time has been snared by Alphabet Inc. (NASDAQ: GOOGL). The company’s artificial intelligence (AI) chatbot, Bard, was hastily announced on Monday and, in a promotional video released at an event in Paris Wednesday, Bard muffed a question. To get the full experience, click on the Play button in this tweet:

Misinformation at scale; bullshit as a service.

(The European Very Large Telescope- not the JWST – took the first optical photograph of an exoplanet in 2004.) https://t.co/J4mJMPORQe

— Grady Booch (@Grady_Booch) February 8, 2023

That answer cost Alphabet about $100 billion in market cap.

To be fair, Microsoft Corp. (NASDAQ: MSFT) stole Alphabet’s thunder by sneaking in its own AI-enabled Bing search engine on Tuesday and the search giant had to put its demo together in a hurry. A Google spokesperson issued a comment:

This highlights the importance of a rigorous testing process, something that we’re kicking off this week with our Trusted Tester program. We’ll combine external feedback with our own internal testing to make sure Bard’s responses meet a high bar for quality, safety and groundedness in real-world information.

Meanwhile, in the mostly real world, former Twitter board chair and co-CEO of Salesforce, Bret Taylor, announced on LinkedIn Wednesday that he and Clay Bavor, vice-president of Google’s experimental division, Google Labs, will begin next month “to create a new company to apply AI to solve some of the most important problems in business.”

Taylor was chair at Twitter when Tesla CEO Elon Musk offered to buy Twitter for $44 billion. When Musk tried to escape, Taylor was the guy who sued Musk to force him to pay up.

Taylor won and the rest of us lost. Wednesday’s installment of Twitter’s impending doom began with the shutdown of the social media’s free API. That broke a number of services and, probably, was responsible for some Twitter users receiving a message that they had reached their daily limit of tweets or had too many followers. Stuff like this happens when a company fires two-thirds of its workforce.

Originally published at 24/7 Wall St.

By Paul Ausick