Bull Tech ETFs Diss Google, Like Microsoft (XLK, QQQ, QLD)

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Bullish Tech Sector ETFs diss Google but cheer Microsoft as earnings pour in.

Major tech sector ETFs were mixed today as negative reaction to Google was offset by earnings reports from Microsoft.

Technology Select Sector SPDR (NYSEARCA:XLK) gained 0.11% while widely held PowerShares QQQ Trust (NYSEARCA:QQQ) shed -0.15% and its leveraged cousin, ProShares Ultra QQQ (NYSEARCA:QLD) lost -0.27%.

The tech sector was widely disappointed by Google (NASDAQ:GOOG) which was slammed for an 8% loss after earnings disappointed investors and traders.

Google lost over $50/share as  as it reported fourth quarter earnings of $9.50 per share which was better than the previously reported $8.75 but well off analysts’ estimate of $10.49.  The company offered various explanations, including the crisis in Europe and increased payroll costs but investors weren’t buying as they forced the stock price sharply lower.

Options traders were particularly badly burned as call option interest was heavy in the company before the report. Call options set to expire tumbled to close to worthless as people took a one day bet on good earnings and a pop in the Google’s price.  Google call options had been running hot, but when earnings came in at $8.13 Billion versus the $8.41 Billion consensus, call options players blew up.

Microsoft (NASDAQ:MSFT) soars 5.65% on earnings

Microsoft investors had a much better day as earnings beat estimates on the strength of the company’s business products and emerging markets growth.

Microsoft (NASDAQ:MSFT) reported net income of $6.62 billion which works out to 78 cents/share and beat the 76 cent/share consensus estimates.  Microsoft finished the week at its highest price/share since May, 2010.

On a technical basis, major technology ETFs like Technology Select SPDR (NYSEARCA:XLK) and PowerShares QQQ Trust (NYSEARCA:QQQ) are in strong uptrends, well above the important 50 and 200 day moving averages and on point and figure buy signals with their share prices near multi-month highs.

Bottom line: The technology sector is a leading driver of  U.S. stock markets and broad based strength here bodes well for the future direction of major U.S. indexes.  Business spending in tech remains strong but weakness in the consumer sector is reflected here, as well.  The outlook is for higher prices ahead.