SAN FRANCISCO — Google Inc.'s second-quarter profit climbed 28 percent, falling below Wall Street's high expectations for the Internet's search leader.

The Mountain View-based company earned $925.1 million, or $2.93 per share, during the three months ended in June. That compared with net income of $721.1 million, or $2.33 per share, at the same time last year.

If not for costs associated with employee stock compensation, Google said it would have earned $3.56 per share. That figure missed the average analyst estimate of $3.59 per share among analysts polled by Thomson Financial.

Revenue for the period totaled $3.87 billion, a 58 percent increase from $2.46 billion at the same time last year.

After subtracting commissions paid to its advertising partners, Google's revenue was $2.72 billion — about $40 million above analyst projections.

Wall Street climbs higher; Dow closes above 14,000 for first time

NEW YORK — Wall Street moved soundly higher Thursday, sending the Dow Jones industrials to their first close above 14,000 as investors kept jitters about the economy at bay and focused on a string of upbeat earnings reports.

The Standard & Poor's 500 index also had a record close.

Profit news from companies like International Business Machines Corp., network equipment maker Juniper Networks Inc., and business software company SAP AG help lift stocks and boosted investors' appetite for technology issues.

Resurgent concerns about the health of subprime loans, which are made to borrowers with poor credit history, hurt financial stocks, while a report that a would-be suitor for Alcoa Inc. had lost interest kept the Dow Jones industrial average from extending its gains.

Microsoft sees profit rise a slight 7%

SEATTLE — Microsoft Corp.'s fiscal fourth-quarter profit edged up 7 percent, despite a hefty charge to cover the cost of defective Xbox 360 video game consoles.

The world's largest software maker said Thursday its earnings for the three months ended June 30 climbed to $3.04 billion, or 31 cents per share, from $2.83 billion, or 28 cents per share, during the same period last year.

Results were weighed down by an 8 cent charge related to the video game console repairs. Excluding this item, Microsoft would have earned 39 cents per share, in line with Wall Street's expectations, according to Thomson Financial.

Revenue climbed 13 percent to $13.37 billion from $11.80 billion last year, just ahead of Wall Street's estimate of $13.27 billion in sales.

Dow Jones director resigns in protest of Murdoch endorsement

NEW YORK — German publishing executive Dieter von Holtzbrinck has resigned as a director of Dow Jones & Co. to protest the board's endorsement of a deal to sell the company, which publishes The Wall Street Journal, to Rupert Murdoch's News Corp.

In a letter included with a securities filing made by Dow Jones on Thursday, von Holtzbrinck said he was "very worried" that Dow Jones' "unique journalistic values will long-term strongly suffer after the proposed sale."

Dow Jones' board endorsed the $5 billion buyout offer from News Corp. late Tuesday, and the proposal has now gone to the company's controlling shareholders, the Bancroft family, for a decision. They are expected to meet Monday and take several days to consider the offer.

Slow months ahead forecast for U.S. economy

NEW YORK — The nation's economy could be in for a sluggish spell in coming months as a downturn in the housing industry takes a deeper toll on businesses and consumers.

The Conference Board's index of leading economic indicators, released Thursday, signaled economic weakness with a 0.3 percent decline in June, more than the 0.1 percent analysts were expecting. The index had risen 0.2 percent in May after dropping 0.2 percent in April.

The report is designed to forecast economic activity over the next three to six months.

Wall Street, meanwhile, focused on upbeat earnings reports. The Dow rose 78.29, or 0.56 percent, to 13,996.51.

Broader stock indicators rose.

Bernanke assures lawmakers on action toward homeowner protection

WASHINGTON — Federal Reserve Chairman Ben Bernanke offered lawmakers fresh assurances on Thursday that regulators are taking steps to better protect would-be homeowners from abusive mortgage practices.

Bernanke appeared before the Senate Banking Committee in his second straight day on Capitol Hill, where he delivered the Fed's midyear economic assessment.

On the housing front, there have been growing problems for borrowers with spotty credit histories who hold higher-risk subprime mortgages. That has rattled investors and irked some lawmakers, who criticize the Fed and other regulators for lax oversight.

Late payments and foreclosures are spiking for homeowners with these subprime mortgages, especially those with adjustable rates.

Continental reports 15% rise in profits

DALLAS — Continental Airlines Inc. said Thursday that profits rose 15 percent in the second quarter as it carried more passengers and increased revenue on its trans-Atlantic flights.

While the strong summer traffic helped Continental beat higher fuel and labor costs, the airline warned that costs will rise in the third quarter.

Houston-based Continental signaled it will slow its ambitious growth plans, a move praised by analysts.

Continental expects capacity to grow 3 percent to 4 percent in 2008, down from an earlier target of 5 percent to 7 percent. The carrier said it will sell older airplanes that get poor fuel mileage.

Shares jumped more than 4 percent early in the day, but closed down $1.03, or nearly 3 percent, at $35.80.

Continental said it earned $228 million, or $2.03 per share, compared with $198 million, or $1.84 per share a year earlier.

Inflation fears inform Fed's stand on interest rates

WASHINGTON — Continuing concerns about inflation underpin the Federal Reserve's stand against changes in interest rates.

That line of thinking prevailed as the policymakers decided to hold the rates steady last month despite a competing concern that the housing slump might short-circuit the economic expansion.

Anguish over inflation held sway at the June 27 meeting of monetary policymakers — as it has at previous sessions — according to minutes released Thursday of the deliberations June 27-28. This record shows that their "predominate concern" continued to be whether inflation would fail to recede as anticipated.

Fed Chairman Ben Bernanke and his central bank colleagues noted there have been some improvements on underlying inflation readings, but this was "not seen as convincing evidence that the recent moderation of core inflation would be sustained," according to the Fed minutes.

Ford moves toward selling Jaguar, Land Rover units

DETROIT — Cash-strapped Ford Motor Co. took a step toward selling its Jaguar and Land Rover units on Thursday when it received an undisclosed number of opening bids for its British automaking businesses.

Thursday was a deadline to submit early bids, but Ford said no sale is imminent.

Ford, which lost $12.7 billion last year and $282 million in the first quarter of this year, has cut thousands of jobs and closed factories in an effort to shrink itself to match lower demand for its products.

The company last year mortgaged its factories to get a $23.4 billion financing package to fuel its restructuring and cover expected losses in its automotive operations. It expects to burn up $17 billion in cash before returning to profitability sometime in 2009.

Motorola posts $28M loss for second quarter

CHICAGO — Cell-phone maker Motorola Inc. posted a $28 million second-quarter loss Thursday as continuing weak sales resulted in its first back-to-back losses in five years.

The company, which analysts believe slipped to third in the world handset market in the quarter behind Nokia Corp. and Samsung Electronics Co., said it expects financial performance to improve in its cell-phone unit in the second half. But it avoided predictions of when a full-fledged recovery will take hold.

Chief Executive Ed Zander, whose job is in jeopardy because of the tailspin and Motorola's inability to come up with a competitive successor to its Razr cell phone, acknowledged that "there weren't many really new 'wow' products" in the company's portfolio in the first half of 2007.

Wall Street numbers

The Dow rose 82.19, or 0.59 percent, to 14,000.41.

The Standard & Poor's 500 index rose 6.91, or 0.45 percent, to 1,553.08; its previous record of 1,552.50 occurred Friday. The technology-focused Nasdaq composite index rose 20.55, or 0.76 percent, to 2,720.04, following a round of upbeat tech earnings.

Gasoline futures for August fell 0.39 cent to settle at $2.1914 on the New York Mercantile Exchange after a volatile session.

Light, sweet crude for August delivery jumped 87 cents to settle at $75.92 a barrel Thursday on the Nymex.

September Brent crude rose 91 cents to settle at $77.67 a barrel Thursday on the ICE Futures exchange in London.