The networking sector got a lift today as two analysts said the shares of industry giant
may have room to move higher and
climbed after striking a deal to supply optical-networking systems to
In early-afternoon trading, Cisco, the most actively traded stock on the
Nasdaq Composite, rose 2.7% to $23.48, after reaching an intraday high of $24.13. The shares, while sharply off their 52-week high of $70, have gained about 23% since last Monday and 48% since April 4. Ciena, which has skyrocketed 74% since its low of $35 on April 4, was up 8% to $65.59.
American Stock Exchange Networking Index
, which tracks the performance of the companies that make routers and switches for networks and the Internet, rose 1.7%. The index has gained about 40% since April 4.
"Tech investors are buying these stocks prior to the improvements in the companies," said Brian Belski, a fundamental market strategist at
U.S. Bancorp Piper Jaffray
, adding that he believes the real upside for earnings is still a couple of quarters away. "The question is whether you buy them before the numbers turn positive. Wall Street seems to be doing this."
Among other networking stocks,
climbed 3.7% to $58.64,
shrugged off earlier weakness to climb 1.9% to $15.50 on the
New York Stock Exchange.
However, others in the group were weaker.
, the recent subject of merger speculation involving
, lately traded down 1.3% to $9.77.
were also dabbling in negative territory.
was off 8.4% to $17.40 following last night's announcement that Chief Executive Vivek Ragavan resigned. Ragavan is the second CEO to leave the company since its founding in 1996.
Credit Suisse First Boston's
Lissa Bogaty issued a favorable note on Cisco after meeting with the company's executives, saying she sees signs of a recovery in its businesses. Bogaty said the "one or more large contract wins (reputed to be in hundreds of millions range)" that Cisco has recently alluded to could begin shipping this quarter. Bogaty, who has a $25 price target on Cisco, also said the company's shares "could go slightly higher on sentiment."
Also this morning,
analyst Christin Armacost issued a report titled, "Cautiously Optimistic on Shares of Cisco," reiterating her buy rating and target price of $28 on the stock. "While we caution that investors should maintain a realistic outlook given the industry conditions, we see reasons to continue to be long-term bullish on Cisco and believe the bias on Cisco's stock should remain upwards."