Cisco Weighs on Tech Stocks
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Tech stocks escaped a blue chip sell-off on Wednesday, but Cisco's (NASDAQ: CSCO) quarterly results released after the bell suggest that the sector could play catch-up on Thursday.
Cisco shares initially rose in after-hours trading after the company beat estimates, with earnings of 32 cents a share on a 7.5% decline in sales to $9.1 billion.
But the company's guidance for a 15-20% decline in current quarter sales well below estimates for an 11% decline sent its shares 5% lower in late trading and Nasdaq futures 2% lower.
Also after the close, Novellus (NASDAQ: NVLS) fell on its results, while BMC (NYSE: BMC) rose on its earnings report.
Cisco's results were the latest evidence of a sharply slowing economy and IT spending environment. Blue chip shares led the market lower during the day on rising joblessness, weak results from Disney (NYSE: DIS) and Kraft (NYSE: KFT), and worries about Bank of America (NYSE: BAC) and the fate of a massive economic stimulus package.
Ticketmaster (NASDAQ: TKTM) and LiveNation (NYSE: LYV) surged on reports that the two could merge.
RadiSys (NASDAQ: RSYS) soared 33% on its results, and CryptoLogic (NASDAQ: CRYP), Travelzoo (NASDAQ: TZOO) and EA (NASDAQ: ERTS) were other big gainers.
Sun (NASDAQ: JAVA) and Seagate (NASDAQ: STX) led the Nasdaq 100 higher.
Rambus (NASDAQ: RMBS) fell 15% after suffering another patent setback.
Time Warner (NYSE: TWX) lost ground on its results, and Alcatel Lucent (NYSE: ALU) slipped 1% on its numbers.
The Nasdaq slipped 1 to 1515, the S&P 500 lost 6 to 832, and the Dow tumbled 121 to 7956. Volume rose to 6.48 billion shares on the NYSE, and 2.27 billion on the Nasdaq. Decliners led by a 20-16 margin on the NYSE, and 16-10 on the Nasdaq. Upside volume was 40% on the NYSE, and 61% on the Nasdaq. New highs-new lows were 9-112 on the NYSE, and 8-121 on the Nasdaq.