RealTime IT News

Stocks Fall Despite Cisco Earnings

Better-than-expected earnings from Cisco Systems couldn't save stocks on Wednesday, as weakness in drug stocks and retailers dragged the broader market lower. The Nasdaq finished the day up only slightly after being up more than 2%.

The ISDEX fell 9 to 742. The Nasdaq rose 4 to 3853, but more than 80 points off its high. The S&P 500 lost 9 to 1473, and the Dow fell 71 to 10,905. Volume rose to 1.05 billion shares on the NYSE and 1.51 billion on the Nasdaq. Breadth was even on the NYSE, but decliners led 21 to 18 on the Nasdaq. Dell Computer will report earnings tomorrow. For earnings reports, visit our earnings calendar and reported earnings.

Cisco Systems beat estimates by a penny with fourth-quarter earnings of 16 cents a share. The company's revenues rose 60% to 5.72 billion, above even the most optimistic estimates of $5.6 billion. Cisco rose 2 5/16 to 67 13/16, but turned back at the important 70 resistance level.

Phone.com soared 12 31/32 to 91 1/32 on news that it is buying Software.com , up 34 5/8 to 142 3/8, for 1.6105 shares of PHCM for each share of SWCM. Phone.com also announced another coup: Cisco executive Donald Listwin, who had been considered heir apparent to Cisco CEO John Chambers, will become CEO of Phone.com.

Analysts did battle over Amazon.com , and the bears won, sending the stock lower by 2 1/16 to 30 7/8. Sanford Bernstein began coverage with a rare Underperform rating, but Salomon Smith Barney reiterated its Buy rating and $80 price target.

Critical Path fell 8 7/8 to 56 1/8, giving back all of yesterday's 5-point gain and then some, after announcing the acquisition of PeerLogic for 6.4 million shares.

Interwave gained 13/16 to 12 9/16 after the company beat estimates by 2 cents with a fourth-quarter loss of 11 cents a share.

PSINet lost 2 7/16 to 17 3/8 on a Chase H&Q downgrade from Buy to Hold. PSI had risen yesterday on a better-than-expected second-quarter loss.

Rhythms fell 1 5/8 to 12 3/8 after Thomas Weisel recommended that investors in the stock sell into strength. The stock gained yesterday on news of the Verizon/NorthPoint DSL merger.

VA Linux gained 4 5/8 to 38 7/8 on a Deutsche Bank Alex. Brown Strong Buy rating.

NBC Internet lost 35/64 to 10 7/16 on news that the company will reduce its workforce by 20%, or 170 employees.

Register.com slipped 1 1/8 to 17 3/8 after the company announced that it plans to withdraw a secondary offering of 4 million shares because of unfavorable market conditions.

MyPoints.com slipped 21/32 to 13 1/32 on a USB Piper Jaffray downgrade from Strong Buy to Buy. CMGI , which was also downgraded by Piper Jaffray, fell 3 7/8 to 36 1/2. CS First Boston reiterated Buy on CMGI.

Juniper Networks gained 6 1/16 to 165 on the heels of Cisco's earnings and a Raymond James Strong Buy rating.

DoubleClick slipped 5/8 to 34 3/16 on a CS First Boston Strong Buy rating. The firm called DoubleClick's restructured contract with AltaVista a positive.

Digital Island lost 2 49/64 to 26 3/4 on a Kaufman Bros. downgrade from Buy to Accumulate. The company met with analysts yesterday.

B2B stocks were lower on lukewarm comments from Jefferies & Co. Commerce One lost 3 15/16 to 47 5/16, again turning back above its recent 52-53 breakout point. Ariba lost 7 1/16 to 135 7/16, barely finishing above yesterday's breakout point of 135. i2