Today: Google passes Exxon to achieve the world's second largest market capitalization, behind only Silicon Valley rival Apple. Also: Wall Street gains despite another mediocre jobs report.
The Lead: Google joins Apple atop list of world's largest market caps
Silicon Valley is home to the world's two most valuable companies as of Friday, when Google surpassed Exxon Mobil in terms of market capitalization, leaving its valuation behind only Apple.
Google gained 1.5 percent to $1,177.44 Friday, giving it a market capitalization -- the total value of all publicly available shares in a company -- of $395.4 billion at the end of the session. Exxon increased 0.9 percent to $90.58, giving it a market cap of $392.7 billion, according to a share count publicized by FactSet on Friday. Many sources -- including Google's own Google Finance service -- use a higher share count for Exxon based on their third-quarter financial report, but FactSet pointed out to Mashable that Exxon reported a total share count of 4.335 million shares at the end of the fourth quarter, down from the 4.369 million figure that is still commonly in use.
Apple is bringing down its share count as well, confirming Friday that it has repurchased $14 billion in shares in the past two weeks, as prices fell following the company's fourth-quarter earnings report, which disappointed some investors and analysts who had hoped for higher iPhone sales during the holiday season. The repurchases are part of a plan to return $100 billion to shareholders in the form of stock buybacks and dividends; activist investor Carl Icahn is agitating for the Cupertino tech giant to increase the amount of repurchases, and cheered CEO Tim Cook on in a tweet Friday.
"We think you want a cash-return program that's flexible," Cook said in an interview with The Wall Street Journal that was published online Thursday night. "We may see a huge company tomorrow that we want to acquire or something may happen in the stock market that's unpredictable. You want to be able to adjust for the long-term interest of the shareholders, not for the short-term shareholder, not for the day trader."
Apple shares gained 1.4 percent to $519.68 after the stock repurchases and Cook's other comments reached investors, sending Apple's market cap to $463.6 billion, according to FactSet's share count. Cook also commented on Apple's plans for a new product line and Google's recent moves, including the Mountain View Internet giant's sale of its Motorola Mobility hardware business to Lenovo for $2.91 billion.
"It seems like a logical transaction. Google gets rid of something that's losing money, something that they're not committed to," Cook said. "I think it's really hard to do hardware, software and services and to link all those things together. That's what makes Apple so special."
Google has been reshaping the company rapidly in the past couple months: In addition to jettisoning Motorola, it has invested heavily in prospective bets on hardware products that could find popularity in the future, such as the $3.2 billion acquisition of Palo Alto startup Nest Labs, which officially closed Friday, and the purchase of robotics company Boston Dynamics. The company's present business isn't stagnating, however, with revenues and profits gaining 17 percent apiece in the fourth quarter of 2013.
Microsoft has the fourth largest market cap, FactSet reported Friday, giving tech three of the top four spots. The next largest market cap for a Silicon Valley tech company is Oracle, which ended Friday with a valuation of $167.3 billion, just ahead of Facebook at $163.8 billion.
SV150 market report: Wall Street gains despite weak jobs report
Wall Street moved higher Friday despite a second consecutive jobs report that showed the U.S. labor market underperforming expectations, pushing indexes to weekly gains despite heavy volatility in daily results.
The Labor Department reported that 113,000 jobs were created in January, below expectations and far from the monthly totals of more than 200,000 the U.S. racked up in four consecutive months as 2013 wound down. The unemployment rate dropped to a five-year low of 6.6 percent, however, and the gains were better than December's disappointing total. Economists pointed to signs of strength within the report, including 115,000 former unemployed people finding jobs, an uptick in the number of people actively seeking a job, and growth in specific sectors such as manufacturing and construction.
"You rarely see expansions in these industries without the economy being in fairly healthy shape," Brookings Institution economist Gary Burtless told The Associated Press. Experts suggested that the results were unlikely to affect the Federal Reserve's plan to continue decreasing its stimulus efforts, with BNP Paribas chief North America economist Julia Coronado telling Reuters, "We don't think the January report is enough by itself to stop the Fed from tapering again."
Silicon Valley joined in Friday's Wall Street gains, with the SV150 jumping 1.5 percent on the day despite uneven responses to Thursday afternoon's earnings and acquisition news. LinkedIn suffered the second largest percentage decline in the SV150 Friday, declining 6.2 percent to $209.59 after its earnings report showed continuing revenue growth but included a 2014 revenue forecast that did not live up to expectations, though many analysts defended the company. The Mountain View professional-networking firm also announced the largest acquisition in corporate history and followed that Friday with the announcement that it will kill off an email-related offering called Intro. OpenTable reversed losses in Thursday's after-hours trading to post a 0.3 percent gain to $75.67 after also pairing an acquisition announcement with an earnings report that included a forecast that disappointed investors. San Jose networking companies Ubiquiti and NetGear jumped after their reports, with Ubiquiti rising 3.7 percent to $42.46 after showing off another quarter of strong growth and NetGear advancing 4 percent to $32.47 after boosting revenues year-over-year.
Twitter and Pandora experienced healthy bouncebacks after post-earnings plunges on Thursday. Twitter gained 8.6 percent to $54.35 a day after its worst day yet on Wall Street, and Pandora increased 6.6 percent to $34.34 to rebound after investors showed disappointment in the Oakland streaming-radio company's forecast. Yahoo gained 2.7 percent to $37.23 after Reuters reported that te Sunnyvale company had moved its European tax base to Ireland, the same country Apple uses to decrease its tax bill. Elon Musk had a strong day, as his Palo Alto electric car company Tesla Motors advanced 4.6 percent to $186.53, and San Mateo residential solar installer SolarCity, which counts Musk as chairman and principal investor, increased 3.7 percent to $71.31.
Up: Twitter, Pandora, Netflix, Tesla, SolarCity, Facebook, SunPower, Gilead, EA, Yahoo, Adobe, Symantec, Workday, Hewlett-Packard, SanDisk, AMD, Google, Nvidia, Apple, Zynga, Oracle
Down: LinkedIn, Palo Alto Networks, Salesforce, Yelp
The SV150 index of Silicon Valley's largest tech companies: Up 22.91, or 1.54 percent, to 1,512.59
The tech-heavy Nasdaq composite index: Up 68.74, or 1.69 percent, to 4,125.86
The blue chip Dow Jones industrial average: Up 165.55, or 1.06 percent, to 15,794.08
And the widely watched Standard & Poor's 500 index: Up 23.59, or 1.33 percent, to 1,797.02
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.