Nasdaq follows Cisco higher

Strong earnings from the tech bellwether lifts the composite, but Dow gives up gains after hitting an intraday record; oil prices slip; after hours, Disney impresses.

By Alexandra Twin, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Cisco's strong earnings gave a boost to the technology sector Wednesday, pushing the Nasdaq composite closer to a six-year high. However, the Dow gave up attempts at another record-breaking close after an early advance petered out.

The Nasdaq (up 19.01 to 2,490.50, Charts) composite added 0.8 percent, moving closer to a six-year high set last month.

The Dow Jones industrial average (up 0.56 to 12,666.87, Charts) was little changed after hitting a record trading high of 12,700.20 earlier in the session.

The broader S&P 500 (up 2.02 to 1,450.02, Charts) index rose two points, ending at a fresh six-and-a-half-year high.

Cisco's earnings report propelled technology shares throughout the early afternoon - and initially gave a boost to blue chips, too. Stocks also benefited from falling oil prices.

While the Nasdaq managed to stay positive through the close, the blue-chip averages gave up gains, with a number of commodity and other economically sensitive shares declining.

After the close of trade, Walt Disney (Charts) reported quarterly sales and earnings that rose from a year ago and topped estimates, sending shares higher in extended-hours trading.

Also after the close, Standard & Poor's said that Varian Medical (Charts) will replace Equity Office Properties Trust (Charts) in the S&P 500 index after the close of trade on a date to be announced.

Earlier in the day, Equity Office accepted a $23 billion buyout offer from private equity firm Blackstone Group.

Earnings reports due Thursday morning include Aetna (Charts) and Toll Brothers (Charts). No economic news is expected.

Cisco Systems (Charts) reported quarterly sales and earnings late Tuesday that rose from a year earlier and topped forecasts. Shares gained 4 percent, and the stock was the Nasdaq's most actively traded.

The company's upbeat earnings report was a relief to investors after a string of discouraging technology sector financial reports.

"The Cisco news helps," said Greg Church, president at Church Capital.

However, he said that broader factors that have been lifting stocks continue to provide support as well.

"Earnings have been well received, the economy is chugging along and nearly every day we're seeing merger news, private equity deals," Church said.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by 9 to 7 on volume of 1.47 billion shares. On the Nasdaq, advancers beat decliners by 3 to 2 on volume of 2.23 billion shares.

What moved?

In addition to Cisco, a variety of large technology shares advanced, including Intel (up $0.20 to $21.51, Charts), Juniper Networks (up $0.58 to $19.21, Charts) and Hewlett-Packard (up $0.29 to $42.30, Charts).

Broadcom (up $1.51 to $33.50, Charts) rose in active Nasdaq trading after Morgan Stanley upgraded it to "overweight" from "equal weight," according to Reuters.

Nortel Networks (up $2.33 to $28.26, Charts) rose after announcing job cuts over the next two years as part of a cost-cutting plan.

A variety of Internet shares advanced, including Yahoo (up $0.54 to $29.89, Charts), eBay (up $0.52 to $33.37, Charts) and Amazon.com (up $0.71 to $38.98, Charts). The Goldman Sachs Internet (Charts) index added 1.7 percent.

However, the blue chips had a tougher time, with the sell-off in oil prices dragging on Dow stock Exxon Mobil (down $0.35 to $74.79, Charts) and others in the energy sector.

In addition to Exxon, Dow decliners included Alcoa (down $0.70 to $32.15, Charts) and Pfizer (down $0.02 to $26.52, Charts).

Gainers included Caterpillar (up $1.22 to $65.64, Charts) and DuPont (up $0.40 to $51.01, Charts).

With almost 70 percent of the S&P 500 earnings already out, results are on track to have risen about 10.6 percent in the fourth quarter versus a year ago, according to the latest figures from Thomson Financial. That's a blended number, combining reported and expected earnings.

Although the growth rate is slower than in recent quarters, by topping the 10 percent mark, it extends the S&P 500's track record to 14 consecutive quarters of double-digit expansion, as per Thomson.

Oil zigzags

Crude oil for March delivery fell $1.17 to settle at $57.71 a barrel on the New York Mercantile Exchange. The price of oil seesawed after the weekly inventories report showed a steeper than expected decline in heating oil supplies.

Oil prices slumped in the first part of January before rebounding more recently. Investors are keeping an eye on the $60-a-barrel mark. Should the price of oil move back above that again, it could spark a little selling, analysts say, as it is seen as a key psychological level.

On the economic front, the first read on fourth-quarter productivity came in at a 3 percent growth rate, up from the previous month and beating forecasts for a 2 percent reading. Unit labor costs, the report's inflation component, came in at a smaller than expected 1.7 percent rate. (Full story).

The overall report seemed to further bets that economic growth, although moderating, remains solid, and that inflation pressures are dwindling.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 4.74 percent from 4.76 percent late Tuesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar gained versus the yen and slid versus the euro.

COMEX gold for April delivery fell $1.40 to settle at $657.30 an ounce.


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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.