Stocks Climb Ahead of Cisco’s Results

With key sectors like semiconductors and financials in bear markets, strength in big-cap technology stocks like Cisco, Microsoft, Apple and Google has kept the Nasdaq near multi-year highs even as the rest of the stock market has crumbled around them.

So investors will look to Cisco’s quarterly results after the market close Wednesday for evidence that technology spending can stay strong in the face of a credit market meltdown that threatens to derail the broader economy.

Analysts are looking for another strong quarter from Cisco, with 16.5% sales growth to $9.54 billion and earnings of 36 cents a share, up from 31 cents in the year-ago quarter. What’s more, they’re looking for Cisco to continue growing at a 15-16% clip into next year and 2009.

And if recent history is any indication, investors will expect Cisco to beat those numbers handily.

Cisco rose 3% Tuesday ahead of its earnings report, and the rest of the market gained as investors finally started buying beaten-down financial stocks, while $97 a barrel crude sent energy stocks higher.

Yahoo lost 5% after getting grilled on Capitol Hill for turning over data that resulted in the jailing of a journalist in China. The controversy overshadowed a 200% gain for in its Hong Kong debut, the biggest Internet IPO since Google’s 2004 debut. Yahoo owns a 40% stake in the company.

Nortel shares soared 18% as investors looked past weaker than expected results to focus on the company’s bullish outlook.

Sun Microsystems fell 10% after missing sales estimates.

DivX soared 32% after beating estimates, but Cognizant and Novatel plunged 20% on their results.

The Nasdaq rose 30 to 2825, the S&P gained 18 to 1520, and the Dow rose 117 to 13,660. Volume declined to 3.83 billion shares on the NYSE, and rose to 2.53 billion on the Nasdaq. Advancers led by a 21-11 margin on the NYSE, and 17-12 on the Nasdaq. Upside volume was 70% on the NYSE, and 57% on the Nasdaq. New highs-new lows were 151-236 on the NYSE, and 125-300 on the Nasdaq.

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