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Wall Street fumbles on Europe fears

Friday, July 20, 2012 - 02:05

July 20 - Summary of today's business headlines: U.S. investors took profits on fears Spain may eventually need a bailout; GE profits top estimates but revenues fall short; Google reports strength in online ads; Xerox cuts annual profit forecast; Kayak Software surges in market debut. Sasha Salama reports.

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Stocks pulled back Friday following three days of gains on renewed worries about Europe. Bank stocks led the way lower after a region of Spain asked Madrid for financial aid to help repay its debt. That stoked fears about Europe's economic crisis and prompted traders to cash in recent gains. The news overshadowed more strong corporate earnings in the U.S.. General Electric beat expectations though revenue fell short on weakness in Europe. GE's Chief Executive, Jeff Immelt, said the environment continues to be challenging. Some economists keep an especially close eye on GE, like Cary Leahey of Decision Economics. SOUNDBITE: CARY LEAHEY, ECONOMIC CONSULTANT, DECISION ECONOMICS, (ENGLISH) SAYING: "The fingers from GE's work is in just about everybody's pie. So it's a very good barometer for the overall economy. And the fact that they're still growing is a positive sign." GE stuck by its profit forecast for 2012. Google reported strength in its online advertising business, reassuring Wall Street that the company's performing well despite the slow economy. Clicks on Google's search ads jumped 42 percent in the second quarter. Xerox cut its profit forecast for the year as companies put off any big equipment purchases. The company, best known for its office copiers and printers, expects revenue to remain weak in its technology business. Kayak Software exploded on its market debut at the Nasdaq. The online travel company's public launch marks the first, consumer-oriented, Internet IPO since Facebook. Taking a look at the closing numbers.. U.S. markets were down across the board. But for the week, the Dow and Nasdaq were up slightly. Investors in Europe rushed to take profits, following four-month highs hit earlier in the week, on news of that bailout request in Spain. Sasha Salama, Reuters.