Bulls Bust Loose on Wall Street - TheStreet

Bulls Bust Loose on Wall Street

Cisco's solid quarter lifts the Nasdaq almost 8%. The Dow and the S&P climb more than 3%.
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Updated from 4 p.m. EDT

Stocks posted huge gains Wednesday, with tech issues leading a charge sparked by

Cisco's

(CSCO) - Get Report

third-quarter earnings report.

The

Dow Jones Industrial Average enjoyed its largest percentage gain since September, closing up 305.28 points, or 3.1%, to 10,141.83. The

Nasdaq skyrocketed 122.47 points, or 7.8%, to 1696.29, its best day in more than a year. And the

S&P 500 added 39.36 points, or 3.8%, to 1088.85.

Cisco reported solid fiscal

third-quarter results after the close Tuesday but offered limited guidance for its fourth quarter. Wall Street was impressed by CEO John Chambers' comments, which suggested an imminent rebound in technology spending and an increase in new orders.

Excluding items, the networking giant posted a third-quarter profit of $838 million, or 11 cents a share, compared with $230 million, or 3 cents a share, a year earlier. Analysts were expecting the company to post earnings of 9 cents a share. Revenue for the quarter rose to $4.8 billion, from $4.7 billion last year.

"From an operational perspective, this quarter was a home run," Chambers said in the company's press release after the close. But he added that fourth-quarter revenue likely would be flat with the third quarter. Shares of Cisco climbed 24% to finish the session at $16.27. The American Stock Exchange Networking Index charged higher, gained 12%, and the Philadelphia Stock Exchange Semiconductor Index rose 11%.

Other high-profile technology names followed suit including

Brocade Communications

(BRCD)

, which traded up 26%;

Sun Microsystems

(SUNW) - Get Report

, 12% higher;

Oracle

(ORCL) - Get Report

, up 11%; and

Intel

(INTC) - Get Report

, which tacked on 11%. Software giant

Microsoft

(MSFT) - Get Report

jumped 11% to $54.97.

An announcement from

General Electric

(GE) - Get Report

also contributed to the positive tone. The Old Economy conglomerate reaffirmed earnings projections for 2002 and 2003, sending its shares up 7% to $32.85. Fellow Dow components

Citigroup

(C) - Get Report

and

IBM

(IBM) - Get Report

were substantially higher as well.

Overall, the pace of earnings reports has slowed, but there were a few companies releasing their quarterly results Wednesday.

CVS

(CVS) - Get Report

, the nation's second-largest drugstore chain, said quarterly profits declined more than 20% as changes in accounting procedures offset new marketing initiatives and improved customer support. Shares of CVS gained 5.7% to $35.53.

Elsewhere, fast-food restaurant chain

Jack in the Box

(JBX)

reported an 8% rise in second-quarter earnings, sending the stock up 1.2% to $33.

Dean Foods

(DF) - Get Report

, a maker of a variety of dairy products, said first-quarter earnings rose on the strength of recent acquisitions. The company also set plans to purchase soy milk producer

White Wave

, a company in which it already owns a stake. Dean was gained 5.4% to $37.27.

Advancing issues crushed decliners on both the

New York Stock Exchange and the Nasdaq, but there were a few notable losers -- in particular, energy trader

Dynegy

(DYN)

. Dynegy's shares ended down 9% to $11.15 after it said the

Securities and Exchange Commission

will begin a formal probe of one of the company's natural gas supply deals. The company said it will cooperate with regulators.

KPMG Consulting

(KCIN)

offered to acquire

Arthur Andersen's

U.S. consulting business and a portion of its overseas units for $284 million, as the embattled accounting firm sells off parts of its operations to raise cash. The deal to acquire Andersen's U.S. branch hinges on the outcome of the

Enron

matter, the bankrupt energy trader whose books Andersen audited.

In Washington, President Bush announced his endorsement of Princeton University's Ben Bernanke, a leading expert on monetary policy, and Donald Kohn, a

Federal Reserve senior staff member, to serve on the Fed's board of governors.

Outside the U.S., violence continued in the Middle East as a suicide bombing killed 15 people and wounded dozens more at a crowded billiard hall near Tel Aviv Tuesday. Israeli Prime Minister Ariel Sharon has condemned the bombing and vowed that Israel would take further action to stamp out terrorism in the West Bank.

U.S. Treasury issues continued to drop during afternoon trading, with the 10-year note down 1 7/32 at 97 13/32, yielding 5.22%. The 30-year bond was the weakest issue.

Overseas markets were mostly higher. London's FTSE 100 was up 1.7% to 5209, and Germany's Xetra DAX rose 3.2% to 5029. Japan's Nikkei 225 finished up 1.8% at 11,521, while Hong Kong's Hang Seng dropped 0.2% to 11,768.