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Facebook Surge Leads Tech Higher

Dan Berman
Hot Stock Minute

The Dow ended with a fractional gain, while the S&P 500 rose 0.2%. But the tech sector was the dominant story today. The Nasdaq gained 0.7% thanks to strong momentum from Facebook. While many companies managed to beat estimates and post year-to-year gains, nobody surged past estimates like the social network which seemed to catch everybody off guard. On the economic front the Labor Department says there were 343,000 new jobless claims filed last week, basically in line with expectations for 342,000 claims. Separately, the Commerce Department says durable goods rose 4.2% in June. Expectations were for a rise of about 1.15%. They climbed 3.6% in May.

Facebook (FB) was by far the biggest star of the day, with shares of the social network climbing nearly 30% after quarterly earnings released yesterday afternoon surprised and impressed investors and analysts alike. To begin with, the company reported adjusted earnings of 19-cents a share, a nickel better than expectations. In addition, revenue was also higher than expected at $1.81 billion versus $1.62 billion. Some other fast facts: mobile ads made up 41% of the total ad revenue, up from 30% in the prior quarter. Plus, the company says it has surpassed 1,000,000 active advertisers.

GM (GM) fell slightly despite topping earnings estimates. The country's biggest automaker posted profits of 84-cents a share excluding items. Expectations had been for 75-cents. Revenue also raced past the consensus at $39.1 billion versus $38.371 billion expected. The company credits aggressive cost-cutting, higher prices here in North America, and a narrowing of losses in Europe.

3M (MMM) shares were flat after the company posted $1.71 a share, beating estimates by a penny. Revenue was razor thin above expectations at $7.8 billion when consensus had been for $7.769 billion. Guidance was unchanged. 3M is often considered an economic barometer because of its wide array of products. The company says it sees continued slow growth in the economy.

PulteGroup (PHM) was pummeled with shares falling more than 10% on its earnings. The company reported earnings of just 9-cents a share due to a 17-cent charge. Estimates had been for 30-cents a share, 4-cents above the actual number even when you exclude the charge. Despite the disappointment, the company says it's selling more homes and at higher prices. PulteGroup's average selling price for a home has increased to $294,000 from $268,000 a year ago.

Chinese internet company Baidu (BIDU) rose 11% after posting profits of $1.26 a share, a nickel better than expectations. Revenue was also above consensus at $1.23 billion versus $1.20 billion. The company says it added a record number of online customers for the quarter. It's also reporting success pushing into mobile, so it has upped the outlook for the current quarter.

Crocs (CROX) stumbled and fell with shares down 20%. The company says it got tripped up in the past quarter reporting earnings of 48-cents a share excluding items when expectations were for 64-cents. Revenue was almost in line with the forecast at $364 million. Crocs is blaming cold weather for the quarter saying it was forced to offer many unplanned discounts. Moving forward, the company is also lowering its outlook. Crocs has been trying to expand beyond its plastic footwear into wedges, sandals and golf shoes.