Stocks End Day Flat As Cisco Weighs on Market
November 14 2019 - 5:05PM
Dow Jones News
By Michael Wursthorn and Caitlin Ostroff
The S&P 500 eked out a small gain Thursday to close at a
fresh record following a tepid session of trading.
The broad index rose in the final hour of trading as shares of
real-estate companies and material firms notched gains along with
communication and consumer-discretionary stocks.
That helped overcome a steep decline in shares of Cisco Systems,
which weighed on the stock market throughout Thursday's session and
kept the Dow Jones Industrial Average and the Nasdaq Composite in
the red.
Analysts blamed the tepid trading session on fresh signs of
doubt around the U.S.'s ability to clinch the first part of a trade
truce with China later this year. The Wall Street Journal reported
Wednesday that U.S. and China continue to haggle over agriculture
purchases, giving investors little enthusiasm to broadly buy
riskier assets.
While stocks were listless throughout most of the session,
assets considered to be safe stores of value notched bigger moves.
Gold rose 0.6%, while the yield on the yield on the benchmark
10-year U.S. Treasury note fell a third straight day. Prices rise
as yields fall.
"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.
Investors will continue to monitor the U.S.-China trade
situation, analysts said, as well as the latest economic figures
due Friday on retail sales and industrial production.
The S&P 500 rose 2.59 points, or less than 0.1%, to 3096.63
Thursday. The Dow industrials, meanwhile, fell 1.63 points, or less
than 0.1%, to 27781.96, and the Nasdaq Composite declined 3.08
points, or less than 0.1%, to 8479.02.
All three indexes were hampered by Cisco's $3.55, or 7.3%,
pullback to $44.91, its biggest drawdown 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.
"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 0.1%, as shares of
several other communications equipment companies declined along
with some semiconductor stocks. Kraft Heinz also slid $1.94, or
5.9%, to $30.96 after Goldman Sachs cut its rating on the food
company.
Real estate and material stocks rallied 0.8% and 0.5%,
respectively, by the session's end, helping the S&P 500
overcome Cisco's weakness. Shares of communication, consumer
discretionary and industrial companies also rose, giving the broad
index some support.
Elsewhere, the Stoxx Europe 600 fell 0.4%, 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.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and
Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
November 14, 2019 16:50 ET (21:50 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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