business‎ > ‎

Mubarak speech sparks late gain; Cisco hits Dow.

posted 10 Feb 2011, 14:42 by Mpelembe   [ updated 10 Feb 2011, 14:46 ]

Egyptian President Hosni Mubarak's speech lifts stocks late, while Cisco shares tumble on weak results.

NEW YORK CITY, NEW YORK, UNITED STATES (FEBRUARY 10, 2011) NYSE - The S&P and Nasdaq eked out gains in the final minutes of trading on Thursday (February 10) as Egyptian President Hosni Mubarak said he would delegate powers to the vice president.

Weakness in Cisco Systems Inc brought the Dow's eight-day rally to an end after the network equipment maker gave a weak outlook.

The S&P and Nasdaq wavered in volatile late-day action as Mubarak began a speech in response to the weeks of civilian protests. Earlier in the day, as media reports spread that Mubarak might resign, equities rebounded off early lows sparked by the disappointment over Cisco.

The Van Eck Market Vectors exchange-traded fund ended up 0.45 percent, cutting gains late when it appeared that Mubarak was not stepping down. Previously, the fund had risen as much as 5.8 percent.

More than two weeks of civilian unrest in Egypt have created some uneasiness among global investors on fears that

political instability could spread through the region and impact commodities. Mubarak's move, however, failed to meet the

demands of protesters that he step down immediately, and they greeted his speech with shouts of rage.

Volume on Wall Street was stronger than in recent days, which had seen some of the thinnest trade of the year. But with

a total of about 8.15 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, volume was still below last year's daily average of 8.47 billion.

The Dow and S&P are both up more than 5 percent since the start of 2011.

Cisco shares tumbled 14 percent to $18.92 (USD) on heavy volume a day after the outlook, but chief competitors surged as investors see Cisco losing market share. Juniper Networks rose 7.6 percent to $43.40 (USD) and the Networking Index surged 3.5 percent.

The Dow Jones industrial average was down 10.60 points, or 0.09 percent, at 12,229.29. The Standard & Poor's 500 Index was up 0.99 points, or 0.07 percent, at 1,321.87. The Nasdaq Composite Index was up 1.38 points, or 0.05 percent, at 2,790.45.

Also weighing on the Dow was Wal-Mart Stores Inc, which fell 2 percent to $55.59 (USD) after UBS downgraded the stock to "neutral" from "buy." UBS said a sales recovery at the retail giant could take longer than expected.

New U.S. claims for unemployment benefits dropped to their lowest level in 2-1/2 years, the government said on Thursday, in a sign the labor market was improving.

Kraft Foods Inc fell in extended trading after it reported fourth-quarter results. The stock, a Dow component, was off 1.6 percent to $30.60 (USD).

Disappointing earnings overseas hurt sentiment as Credit Suisse missed profit expectations. The bank's U.S.-traded shares dropped 7.2 percent to $43.27 (USD) while peer Deutsche Bank fell 2.6 percent to $62.61 (USD) on the New York Stock Exchange.

Soft drink and snacks maker PepsiCo Inc cut its full-year earnings growth target, sending shares down 1.6 percent to $63.36 (USD).

The number of advancing stocks slightly outnumbered the number of declining issues on both the New York Stock Exchange and Nasdaq.