Cisco Tops Estimates

Cisco Systems beat earnings and revenue estimates after the close on Tuesday, capping a volatile day in the stock market.

Cisco slipped after hours on flat guidance. The company struck a couple of cautiously optimistic notes: bookings improved somewhat in April, and a few CEOs are becoming less conservative when it comes to spending. But overall, the company did not provide the evidence of a rebound in technology spending that investors were hoping for.

The broader market ended the day higher after the Federal Reserve shifted its bias toward economic weakness and said the risk of deflation is higher than the risk of inflation. The market initially sold off on the Fed’s statement, which portrayed a weaker economy than traders expected and raised deflation fears, but stocks recovered to close higher. The bias shift could mean another rate cut in June.

The Nasdaq rose 19 to 1523, the S&P 500 climbed 7 to 934, and the Dow gained 56 to 8588. Volume rose to 1.6 billion shares on the NYSE, and 2.1 billion on the Nasdaq. Advancers led 22-10 on the NYSE, and 19-12 on the Nasdaq. Upside volume was 72% on the NYSE, and 76% on the Nasdaq. New highs-new lows were 227-6 on the NYSE, and 196-10 on the Nasdaq.

LookSmart plunged 37% on a warning.

WebMD plunged 15% on mixed results and a new CEO, and JD Edwards lost 11% on a warning. Wireless Facilities rose 4.7% after beating estimates.

HP gained 3.2% on a partnership with Microsoft and a new enterprise strategy.

McData slipped 1.4% despite raising estimates.

PeopleSoft lost 1% despite a Linux deal with IBM , which climbed 1.1%.

AOL slipped 0.7% on opposition to the company’s IM services plans. AOL also named a new interactive marketing chief.

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