(Updated from 10:55 a.m.)
slashing of the 12-month price target on networking giant
to $60-$65 from $90, tech stocks are sagging.
Dow Jones Industrial Average sprinted into the green. It was lately up 142 to 10,733.
The tech heavy
Nasdaq Composite Index was weakening as the lunch hour approached on Wall Street, lately off 124 to 3154. The
S&P 500, a good gauge of the broad market, was moving up 1 to 1381.
Cisco, the most actively traded stock on the Nasdaq, was off 8.3% to $46.50, and its blues were spreading to the rest of the optical, networking and storage stocks this morning.
Cisco reported in early August that its fiscal fourth-quarter profits topped analyst expectations, strengthened by strong sales to Internet service providers, cable and telephone companies. But the opticals and networking group has been under fire since last week, when
warned of weakness in optical sales for the year. Tech stocks in general have gotten whacked this quarter as a slew of third-quarter earnings disappointments have investors worried that price-to-earnings valuations in the sector remain too high.
Nortel was lately 6.5% lower,
was off 6.6% to $169,
was falling 10.73% to $93.38, and
was 9.2% lower to $229.
Meanwhile, some economic data out this morning showed that both consumer income and consumption remain strong, which could be a sign that inflation hasn't yet disappeared. September
personal income came in at a 1.1% rise, compared with expectations of a 0.4% rise. It marked the biggest gain since income rose 1.3% in October 1999. Spending in September went up 0.8% compared to expectations of a 0.6% rise -- that's the fastest rate of spending in six months.
But the Dow may still be getting support from Friday's
gross domestic product figure. The moderately cooler-than-expected number boosted optimism that the U.S. economy is slowing at a reasonable pace and that a recession is unlikely.
Prospects are looking up, even if just a bit, for oil prices and the euro. Crude oil futures were falling after OPEC, the organization of oil exporting countries, announced it would increase output by some 500,000 barrels. And the euro rose to a one-week high following the recent signs of a slowdown in U.S. economic growth. That's good news for company earnings -- if these trends continue. Several high-profile companies blamed high oil prices or a weak euro for earnings weakness this quarter.
The Dow was rising on broad strength in many of its components.
Only four stocks in the Dow were down, including
, off 13 cents; consumer products multinational
Procter & Gamble
, off $1.38; semiconductor bigwig
, down $2; and PC-maker
, off $1.81.
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Paper stocks were flying after receiving an upgrade from
Deutsche Banc Alex. Brown
this morning. Both Dow component
were upgraded to strong buy from buy. International Paper was up 7.5%, Bowater was 8.6% higher. The
Philadelphia Stock Exchange Forest & Paper Products Index
, which tracks the sector, was 6.1% higher.
Biotechs were getting slammed for the third day in a row. The
Nasdaq Biotechnology Index
was off 4.8%. Investors were continuing to hack away at
shares after that company issued an earnings warning last week. Amgen was lately off 10.8%.
Cyclicals were soaring after Lehman Brothers upped this sector's weighting in its global portfolio this morning. The
Morgan Stanley Cyclical Index
was lately up 4.1%.
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The bond market shrugged off this morning' stronger-than-expected economic data. The benchmark 10-year
Treasury note was lately up 1/32 to 100 6/32, putting its yield at 5.723%.
Personal income and consumption
) for September were both higher. Personal income rose 1.1%, much higher than the forecasts of a 0.4% rise and above the prior month's increase of 0.4%. Personal consumption rose 0.8%, beating forecasts of 0.6% increase.
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