Ciscodelivered strong earnings and guidance late Tuesday, but investors just couldn’t bring themselves to reward the networking giant.
Cisco lost 1% during Wednesday’s trading session, as investors ignored stellar results and instead fretted about rising inventories and whether a sequential decline in router revenues meant that Juniperwas stealing high-end market share.
What it may come down to is that despite a strong report, Cisco remains richly valued, at 34 times earnings and seven times sales. And with earnings growth expected to slow over the next year, that could mean slow going for Cisco investors.
Stocks finished the day mixed, but that was a dramatic improvement from the steep declines the indexes were in just two hours before the market closed.
The Nasdaq lost 5 to 1925, the S&P 500 added 1 to 1097, and the Dow climbed 25 to 10,045. Volume rose to 1.7 billion shares on the NYSE, and 1.89 billion on the Nasdaq. Advancers led 17-15 on the NYSE, but decliners led 17-14 on the Nasdaq. Upside volume was 52% on the NYSE, and 37% on the Nasdaq. New highs-new lows were 8-208 on the NYSE, and 21-100 on the Nasdaq.
After the close, Mamma.comblew past estimates with earnings of 13 cents a share.
During the day, Red Envelopefell 10% on its earnings report, but Sycamoregained 3% on its results.
Wireless Facilitiesrose 3% on a Defense Department contract.
Qualcommslipped despite raising guidance.
Novellgained 3% on Linux plans.
AT&Tedged higher on a contract with Lockheed Martin.
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