Cisco: Was It Really Any Surprise?
Stocks were higher on
Tuesday. It was the best day in the last 10 trading sessions for the
Dow. The Fed raised rates by 25 basis points to 1.5%. The Fed statement
was fairly bland, acknowledging the soft patch in the economy, saying economic
weakness is due to rising energy prices and that the economy was poised to pick
up. Fed fund futures now price in a 75% chance of a 1/4 point increase in
September; the next meeting is scheduled for 9/21. This was the second quarter
point rate hike this year, the first being at the June 30 meeting.
Productivity rose faster than expected for the
second quarter — although at the slowest
pave in over 18 months. Oil made new record highs,
although at press time is off these highs. Oil continues to weigh heavily on the
airlines. The Airline Index
(
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PowerRating) although up today, is trading near
52-week lows. For American Airlines, every
penny represents $30 million in additional fuel costs annually. Still, travel
seems to be strong — Four Seasons said they see “continued
recovery in business and leisure travel demand.”
Lehman lowered their rating on the Semis to
neutral and downgraded Fairchild
(
FCS |
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PowerRating) and Xilinx
(
XLNX |
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PowerRating).
The Google IPO bidding registration closes
at 5 PM ET on Thursday. Investors must go
here and have until Thursday at 5 PM to register for a bidder number. Those
with bidder numbers can then submit bids. After the paperwork is out of the way,
the company will schedule the auction. When the auction begins, the IPO price
will be determined by bids.
After the close, Cisco
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PowerRating)
reported Q4 of $0.21, beating estimates by a penny. Net income was $1.38 billion
on $5.9 billion revenues, beating estimate. The company has beaten by a penny
the past three quarters.
Disney
(
DIS |
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PowerRating) reported Q3 of $0.29; the
company earned $0.24 a year ago; the net was $604 million on $7.47 billion in
revenues, which beat estimate.
| Dow | +130.01 | 9944.67 |
| S&P 500 | +13.82 | 1079.04 |
| Nasdaq | +34.06 | 1808.70 |
Strong today were: Airlines
(
XAL.X |
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PowerRating)
+3.33%,
Internet
(
GIN.X |
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PowerRating) +3.64%.Brokers
(
XBD.X |
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PowerRating)
+2.68% and Healthcare
(
HMO.X |
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PowerRating) +2.76%.
Oil was weak
(
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PowerRating)
-0.32%.
10-year Notes were -115 at 112 040.
The dollar
was +0.36 at 88.76.
Gold was +0.70 at
399.60.
Crude Oil was -0.31 at
44.53
Volume was 1.24 billion
on the NYSE and 1.42 billion on the Nasdaq.
Market breadth was positive.
| NYSE | Issues | |
| Advancing | 2386 | Up Vol 939 |
| Declining | 894 | Down Vol 174 |
| Ratio | 2.66 | 5.39 |
| Nasdaq |
||
| Advancing | 2162 | Up Vol 938 |
| Declining | 949 | Down Vol 376 |
| Ratio | 2.27 | 2.49 |
Stocks in the News
Nvidia
(
NVDA |
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PowerRating) will buy back
up to $300 million of stock.
Roxio
(
ROXI |
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PowerRating) will be renamed and
retickered to NAPS — it’s the parent of Napster.
EchoStar’s
(
DISH |
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News |
PowerRating) board authorized
the repurchase of up to $1 billion in stocks; the company added 340K subscribers
in Q2
Taser International
(
TASR |
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News |
PowerRating) said it
received four stun gun orders totaling over $700,000. Three orders came from law
enforcement agencies in Arizona and California.
Trump Casinos
(
DJT |
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PowerRating) will file for
bankruptcy protection; the stock is trading at 1.85.
AmeriCredit
(
ACF |
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PowerRating) s higher after
posting a quarterly profit yesterday.
May Department Stores
(
MAY |
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PowerRating) reported
higher profits despite weaker sales.
El Paso
(
EP |
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News |
PowerRating) said it would further restate financial results.
Brice Wightman
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