Markets Down on Cisco's Report
N E W Y O R K, May 8 -- Technology stocks sagged after bellwether Cisco Systems Inc. reporteda sharp quarterly loss and remained guarded about the future,dimming hopes the sector can quickly snap out of its slump.
The tech-laden Nasdaq Composite Index fell 42.95points, or 1.95 percent, to 2,155.82. Cisco, which posted a netloss of $2.69 billion after charges, led the index lower with adecline of $1.29 to $19.09.
The blue-chip Dow Jones industrial average also gaveway to selling pressure by the end of the day, falling 17.05points, or 0.16 percent, to 10,866.46. The broader Standard &Poor's 500 Index dropped 5.79 points, or 0.46 percent,to 1,255.41.
"Everybody wants to believe that the worst is over, but whydoes that have to be?" asked Donna Van Vlack of BrandywineAsset Management, which oversees about $7 billion. Cisco stockis "still not cheap, there's still no visibility, it has a lotof issues and the news seems to be getting incrementallyworse."
"Old Economy" behemoth General Electric Co. put afloor under blue-chip shares for part of the session after itsaid it was well-positioned to battle the economic downturn andnarrowed its full-year profit target. GE turned lower by theend of the session, however, falling 5 cents to $49.43.
Precious metals, typically a refuge in uncertain equitiesmarkets, ranked as one of the best-performing groups in the S&P500. The Philadelphia Stock Exchange gold and silver index surged 6.57 percent.
Tuesday’s Highlights
Blue chip stocks closed lower Tuesday after newgovernment data showed worker productivity fell for thefirst time in six years, stoking fresh concerns about theslowing economy and brewing inflation.
But technology shares rose after Morgan Stanley raised itsrating on Cisco, saying it expects the market for the company'skey products to turn the corner soon.
The blue chip Dow Jones industrial average lost51.66 points, or 0.47 percent, at 10,883.51, led lower byfinancial shares like American Express.
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