August 02, 2013, 4:52 PM — Tech stocks had an upbeat week as industry watchers appear to be looking at the positive side of earnings from Internet, consumer electronics and networking companies.
IT industry bellwethers have reported mixed results for the quarter ending in June. This week, earnings season continued with reports from LinkedIn, Yelp and Sony, among other companies.
Tech shares led markets to close up Friday, even though several indexes were down earlier in the day after a tepid report on the U.S. jobs market. The Labor Department said that although the unemployment rate fell last month to 7.4 percent, its lowest since 2008, the country added just 162,000 jobs in July, below the average monthly 202,000 this year.
The tech-heavy Nasdaq gained 0.36 percent to close up by 3.34 points at 15,658.36. The Nasdaq Computer Index rose 0.56 percent to 1735.89.
This week, professional social network LinkedIn was the tech star, announcing second quarter revenue of US$363.7 million, an increase of 59 percent year over year, while net income rose from $2.8 million to $3.7 million. LinkedIn membership grew to 238 million, rising 37 percent year-over-year.
LinkedIn shares spiked Friday afternoon by $22.58 to close at $235.58.
"Decisions made two years ago to re-write LinkedIn's code base have enabled rapid product innovation, which is driving much higher member engagement, creating a foundation that helped fuel tremendous self-service ad sales," said Canaccord Genuity analyst Michael Graham in a research note.
Online user business reviews site Yelp also came out with strong results, reporting that net revenue jumped 69 percent year over year to $55 million. The company's loss shrank to $878,000 from $2 million. The average number of unique visitors per month rose 38 percent year over year to approximately 108 million, while active local business accounts increased 62 percent year over year to approximately 51,400.
Yelp shares jumped Friday by $5.52 to close at $57.02.
Though LinkedIn and Yelp revenues are minuscule compared to Facebook's, their rising user statistics appeared to fuel the general good feeling toward Internet stocks. Last week, Facebook said mobile ad sales stoked revenue, which jumped 53 percent year over year to $1.81 billion, while profit totaled $333 million compared to a net loss a year earlier.
Facebook this week finally succeeded in clawing its way back to its May 2012 initial public offering price of $38, on Friday closing at $38.05.