Tag Archives : business

For Cisco Stock, ‘Air Pockets’ Trigger Historic Fall

SAN FRANCISCO (MarketWatch)–Cisco Systems Inc. (CSCO) Chief John Chambers blamed “air pockets” in the market for the company’s weaker-than-expected outlook, suggesting the setback was very temporary.

But the unexpected, and unusual, miss for the tech bellwether–which Chambers attributed partly to weak public sector demand–was so surprising for Wall Street that Cisco’s took its biggest one-day drop in 16 years.

Cisco shares were down 16.2% to close at $20.52 Thursday, the steepest decline since July 1994, according to data from FactSet Research. News by Wall Street

From the Business week
Nov. 11 (Bloomberg) — Disappointing sales and profit forecasts from Cisco Systems Inc. show cutbacks in government spending that pose risks for companies that rely on the sector for growth.

Governments in Europe, Japan and some U.S. states reduced orders as their budgets came under pressure, said John Chambers, chief executive officer of the world’s largest computer networking-equipment maker. State government orders fell 48 percent in the last quarter from the previous period, he said.

Shares slip as Cisco weighs on US stocks

Australian shares are have opened lower after Wall Street fell on a weak outlook from technology giant Cisco.

In early trade, the benchmark S&P/ASX200 index fell 18.4 points, or 0.4 per cent, to 4710.2 and the All Ordinaries dropped 16.1 points, or 0.3 per cent, to 4794.2.

The dollar fell below parity overnight, as growing worries over euro-zone debt strengthened the US dollar. The Aussie was recently trading at 99.77 US cents. News by Sidney Morning Herald

Existing US home sales off 27% in July, worse in Midwest. A bigger-than-expected drop in July home sales renewed fears Tuesday that the US economic recovery is stumbling and could be heading for a fall. Sales of previously occupied homes in the United States fell 27 percent in July.

Economists were divided about whether the larger fall-off was temporary or would drag on for many months. “It’s an echo of the ‘cash for clunkers’ program for car sales,” said Dana Johnson, chief economist for Comerica Bank. “People rush in to take advantage of a short-term opportunity provided by the government. Then the opportunity goes away and sales crash for a while.”

Diving home sales stoke new worries about economic recovery. U.S. sales fall for the third consecutive month to the lowest rate since 1999, pushing down stocks and fueling fears of a ‘double dip’ in the housing market.

“You are seeing the sales drop off a cliff again, and that is really starting to scare people,” C.J. Jones, head of institutional trading at Nollenberger Capital Markets, said Tuesday. “Are we going to have a double dip? Nobody knows.”

Biggest U.S. home sales plunge in decades. Sales fell twice as much as forecast, dropping to 3.83 million on an annualized basis, the National Association of Realtors said. The median forecast of economists was 4.65 million, according to a Bloomberg news survey.

“This is a devastating reading on the U.S. housing market,” said Derek Holt, an economist at Scotia Capital Inc. in Toronto. “There’s such an inventory overhang, it shows there will be pressure on prices” in the months ahead.