|
Wall St.'s Cisco woes
|
 |
February 7, 2001: 7:08 a.m. ET
Weak results from tech bellwether sending shivers through U.S. markets
|
NEW YORK (CNNfn) - Two days of fretting about Cisco Systems' earnings apparently were justified, as U.S. stock markets get set to open lower Wednesday after the No. 1 maker of data network gear reported results that missed Wall Street forecasts.
Early indications point to a sharply lower open for the Nasdaq market, with Nasdaq-100 futures down about 2 percent with fair value considered. Standard & Poor's futures fell less severely, but still forecast weak starts for the S&P 500 and the Dow Jones industrial average.
 Cisco Systems disappointed investors and analysts with its fiscal second-quarter results released late Tuesday. In a rare miss, the network equipment maker fell short of earnings targets by a penny and told analysts to be "more conservative" about their growth estimates in the future.
In before hours trading Wednesday, Cisco (CSCO: Research, Estimates) shares fell $3.77 from their regular-hours close, to $31.98. The shares gained $1.19 in regular hours Tuesday.
The Nasdaq composite index starts at 2,664.49 following a 21-point gain, tempered by anxiety about Cisco's results. The Dow industrials begin at 10,957.42 after falling about 8 points Tuesday, while the S&P 500 stands at 1,352.26 following Tuesday's 2-point dip.
Treasury prices rose early Wednesday, sending yields lower. The 10-year note yield slipped to 5.17 percent from 5.21 percent late Tuesday, while the 30-year bond yield dipped to 5.50 percent from 5.51 percent.
The dollar rose against both the euro and yen. Brent oil futures rose 15 cents a barrel to $27.59 in London.
Major Asian markets closed mostly higher Wednesday, with telecom stocks lifting major indexes in Tokyo and Hong Kong. But weakness in the telecom sector sent European indexes lower.
German-American automaker DaimlerChrysler Wednesday reported a 49 percent drop in 2000 operating profit, due mainly to losses at its Chrysler division in the United States. U.S. shares of DaimlerChrysler (DCX: Research, Estimates) closed Thursday at $48.23, down 94 cents. In Frankfurt, shares rose 0.10  to 52.20 in early Friday trading.
Troubled HMO PacifiCare Health Systems (PHSY: Research, Estimates) more than doubled fourth quarter earnings forecasts as well as its own guidance for the period, even though earnings fell sharply from year-earlier results. The earnings report late Tuesday sent shares up $4.38, or 18 percent, to $29.13 in after-hours trading, after a drop of 75 cents in regular-hours activity.
 News Corp. (NWS: Research, Estimates) is reported to be on the verge of crafting a $70 billion satellite TV company by acquiring DirecTV from General Motors' Hughes Electronics (GMH: Research, Estimates). The report in the Financial Times says Microsoft (MSFT: Research, Estimates) and Liberty Media chairman John Malone are also involved in the deal. The tracking stock for Hughes closed at $27.71, up $1.41, while News Corp.'s American depositary receipts (ADRs) rose 20 cents to $37.50.
News Corp. and its Fox Entertainment (FOX: Research, Estimates) unit are both set to report financial results Wednesday. Analysts surveyed by earnings tracker First Call forecast that News Corp. fiscal second quarter earnings per share fell to 19 cents from 25 cents a year earlier, while Fox's EPS for the period are seen falling to 8 cents from 13 cents. Shares of Fox, which are 83 percent owned by News Corp, gained 62 cents to $20.86 in trading Tuesday.
Among other companies expected to report results Wednesday include insurer Allstate and brewer Anheuser-Busch.
Allstate (ALL: Research, Estimates), which is expected to report fourth quarter results before the market open, is expected to see EPS rise to 72 cents from 66 cents a year earlier. Shares of Allstate slipped 16 cents to $40.04 in trading Tuesday.
Anheuser-Busch (BUD: Research, Estimates), which is due to report fourth-quarter results during the trading day, is forecast to have EPS rise to 23 cents from 20 cents a year earlier. Shares of the the world's largest brewer lost 20 cents to $40.70 in trading Tuesday.
Economic reports due Wednesday include a preliminary reading on productivity in the fourth quarter and a measure of consumer borrowing levels in December. A survey of analysts by Briefing.com forecasts that productivity increased 2.5 percent in the fourth quarter, although that's down from the 3.3 percent rise in the third quarter. Consumer credit is forecast to have fallen to $8.5 billion from $12.9 billion in November. 
|
|
|
|
|
 |
|
INVESTORS' HOT LINKS
