Not the trend you want if you are long this market…

After the close Google (NasdaqGS: GOOG) reported their first quarter earnings and the company once again grew at an impressive double digit rate with profits up over 17%. Unfortunately, that was not enough for the street as Google’s stock is currently down over $30 per share in the after hours trading session. This is another example of a widely followed ¬†company not exceeding analysts expectations as was the case with Alcoa (NYSE: AA). Alcoa reported their earnings earlier this week and also did not meet analysts expectations. Alcoa’s stock has lost over 6% of its value since reporting and based on the after hours action, Google may follow suit.

So now what? A flood of earnings reports will be coming out over the next few weeks and what has happened to Alcoa’s and Google’s stock price proves out my earlier concern over the weekend (blog). It is clear now that if companies are not demonstrating significant top-line growth, the street will be unforgiving. Hopefully this is not the beginning of a bearish trend in equities but also make sure to protect your profits.

~George