Google Fights Back
After 4 months, Google Inc. (GOOGL -1.37%) finally responded to the antitrust charges which have been laid against the Internet giant by the European Commission (EC). In April this year, the EC filed two antitrust charges against Google. The first one was directed at the company’s Android operating system, while the second filing accused Google of showing preference of its own results against competitors via Google Shopping. This practice is considered to be illegal under the antitrust laws of Europe as it is viewed as an anti-competitive practice. In their response to the EC, Google strongly criticized the EC for their charges stating that they were ‘unfounded’. According to Kent Walker, who is the SVP and general counsel at Google, the Internet search giant displays search results in the most logical way which cannot be considered to be anti-competitive. Walker went on to say that if Google adapts their search results to the requirements of the EC, this in fact would negatively impact the quality and relevance of their results. The EC confirmed that they had received Google’s response and it is now under consideration. Interestingly, five years ago, Google decided to exit China, the world’s largest Internet market, as opposed to accepting their censorship rules. The big question now is what will Google’s next move be?
In U.S. trading on Friday, U.S. stocks ended one of the most volatile trading weeks with modest weekly gains. During the trading session on Friday, the main indices moved in and out of negative territory as it was evident that investors were unsure about how to interpret the comments from the Federal Reserve officials regarding the timing of an interest rate hike. According to Fed Vice Chairman Stanley Fischer, the central bank is likely to act this year but he did not give an indication regarding the specific month. At the close of trading, the Dow Jones Industrial Average (DJIA) declined 0.98%, or 11.76 point, to 16,643.01. For the week, this blue chip index gained 1.1 percent. Also on the upside was the S&P 500 index (SPX) which closed one point higher at 1,988.87. These gains were led by the energy sector as a result of an increase in oil prices and for the week, the SPX recorded a 0.9% weekly gain. Following the upward trend was the tech heavy Nasdaq Composite index (COMP) which rose 0.3%, or 15.62 points, at 4,828.32. For the week, the Nasdaq rose 2.6 percent.
In currency trading on Friday, the U.S. dollar (USD) traded higher. This came as a result of positive data out of the U.S. which boosted optimism regarding the strength of the country's economy. This in turn, fuelled speculations that the Federal Reserve is likely to increase rates in September. According to the University of Michigan, its consumer sentiment index declined from 92.9 in July to 91.9 in August. This missed analysts’ expectations for an increase to 93.0. In a separate report, the U.S. Bureau of Economic Analysis reported that the goods trade deficit narrowed from $62.26 billion in June to $59.12 billion in July. The greenback traded steady against the Japanese yen with USD/JPY at 121.02 while the EUR/USD traded at 1.1225, down 0.18%. Against the currencies in Britain, Australia and Switzerland, the U.S. dollar traded mixed with the GBP/USD down 0.38% at 1.5343, the AUD/USD down 0.36% at 0.7140 while the USD/CHF dropped 0.49% to trade at 0.9617. Also, the U.S. dollar index was at 95.96, up 0.23%.
On Friday, U.S. crude futures extended a rally. This came only 1-day after the commodity posted its strongest session in six years. This boost came about as a result of reports which stated that Venezuela could be pushing OPEC to hold an emergency meeting in an attempt to stop the declining energy prices globally. WTI crude oil for delivery in October traded at $45.25, up 6.33%, or $2.69, on the New York Mercantile Exchange. Interestingly, with gains seen in oil prices both on Thursday and Friday last week, U.S. crude futures are now only down by roughly 3% over the month of August. Meanwhile, Brent crude oil for delivery in October traded at $50.13 a barrel, up 5.41%, or $2.59, on the Intercontinental Exchange (ICE) in London.