Microsoft and Google are out with disappointing second-quarter results. Google shares dropped nearly 8 percent in pre-market trading after sales and profit missed Wall Street forecasts. Google reported a decline in growth for search ad revenues. The firm is still facing a major challenge navigating the transition driving more online activity to smartphones and tablets. Because of small screen sizes, mobile devices fetch lower ad rates than on personal computers. Google's average ad rate fell by 6 percent from the same time last year during the three months ending in June. It marks the seventh consecutive quarter of falling ad prices.
Poor sales of Windows 8 software and the sliding PC market were behind disappointing results at Microsoft. The company booked a $900 million write-down for slashing the price of its Surface RT tablet. Microsoft shares fell 3 percent after the report was released.
It's the down side of an up economy. Oil futures hit $108 a barrel this morning - that's a 16-month high. The recent rise has led to higher gasoline prices for motorists. Oil has jumped 12 percent this month and one reason for the rise is signs of a stronger economy, which may lead to more demand for energy.
Moody's Investors Service upgraded the outlook for US. government debt to "Stable" from "Negative" and affirmed its AAA rating. The firm cited a surprising drop in the federal deficit. The government is on track to report the lowest annual deficit in five years. Through the first eight months of the budget year, the deficit has totaled $509.8 billion, according to the Treasury. That's nearly $400 billion lower than the same period last year.
CBS and Time Warner Cable are in a public spat over fees in three major TV markets. If it's not resolved, six local CBS TV stations could go dark for around 3 million Time Warner Cable customers in New York, Los Angeles and Dallas starting Wednesday. The dispute is over how much Time Warner Cable pays for retransmitting signals from six stations: WCBS and WLNY in New York; KCBS and KCAL in Los Angeles; and KTVT and KTXA in Dallas. Dozens of blackouts have occurred nationwide in fee fights, but many get resolved at the last minute.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc