Stocks End Day Flat As Cisco Weighs on Market
November 14 2019 - 4:51PM
Dow Jones News
By Michael Wursthorn and Caitlin Ostroff
Major U.S. stock indexes finished the day near where they ended
Wednesday after a disappointing forecast from Cisco Systems sent
shares of the networking giant sharply lower.
Cisco shares slid 7.3%, the stock's biggest pullback in roughly
three months, after the company said late Wednesday that it expects
to book its first quarterly revenue decline in more than two years.
The networking giant, considered a proxy for corporate high-tech
hardware demand, blamed lighter customer spending for the
lackluster outlook.
Investors also contended with signs of ongoing friction between
the U.S. and China, as the two sides haggle over agriculture
purchases, The Wall Street Journal reported Wednesday. That gave
investors little enthusiasm to buy riskier assets, such as stocks,
and instead encouraged more buying of haven assets, including gold
and U.S. Treasurys, analysts said.
"Investors need to see something that they're comfortable with
on the trade front," said Mike Bailey, director of research at FBB
Capital Partners. Until then, "It's a 'hold your breath' type of
market," he added.
The Dow Jones Industrial Average ended the trading session down
1.6 points, or less than 0.1%, to 27782 after the blue-chip index
bobbed around the flat line earlier in the session. The S&P 500
rose less than 0.1%, while the Nasdaq Composite declined less than
0.1%.
Earlier, Cisco's move acted as a significant drag on the
price-weighted Dow industrials, accounting for about a third of the
index's decline. It also fell more than any other stock in the
S&P 500.
"We're painfully aware of the situation" with Cisco, Mr. Bailey
said. Despite Cisco's bellwether status, the company's problems
appear to be restricted to itself, he added.
Technology stocks in the S&P 500 fell 0.6%, as shares of
several other communications equipment companies declined along
with some semiconductor stocks.
Health-care stocks also fell, adding to the pressure on major
indexes. Several biotechnology stocks led the declines, including
Biogen, which fell 3%.
Falling shares of Kraft Heinz also factored into Thursday's
downbeat session. The food company slid nearly 6% after Goldman
Sachs cut its outlook on the stock.
Elsewhere, the Stoxx Europe 600 fell 0.2%, led by declines in
auto makers.
Asian stocks, meanwhile, were mixed, with the Shanghai Composite
up 0.2%, while Hong Kong's Hang Seng waned 0.9% as antigovernment
protests snarled the city. Clashes between police and protesters
have intensified in recent days.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and
Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
November 14, 2019 16:36 ET (21:36 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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