Cisco's dour outlook weighs on Wall Street

By Arjun Panchadar (Reuters) - U.S.

Reuters November 15, 2019 02:07:28 IST
Cisco's dour outlook weighs on Wall Street

Ciscos dour outlook weighs on Wall Street

By Arjun Panchadar

(Reuters) - U.S. stocks dipped on Thursday, weighed down by technology shares after Cisco's weak forecast raised worries of a slowdown in global economic growth, overshadowing strong results from big box retailer Walmart.

The pullback in the benchmark S&P 500 <.SPX> and blue-chip Dow Jones Industrial Average <.DJI> came a day after they closed at record highs.

Cisco Systems Inc tumbled 7.7% after it warned current-quarter revenue would drop 3% to 5% amid declining global spending on its routers and switches, some of which are made in China.

The network gear maker weighed the most on Wall Street's main indexes, and pulled the tech index <.SPLRCT> 0.30% lower.

Walmart Inc posted robust same-store sales growth and profit, while also raising its full-year earnings forecast. Shares were last up 0.1%, after hitting a record high earlier in the session.

Strong results from the world's largest retailer came ahead of a crucial retail sales report by the U.S. Census Bureau on Friday.

"(The pullback) is not very much ... there has been pressure in things like Cisco which has outweighed the interest in better reports from Walmart," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

Six of the 11 major S&P sectors were higher, with defensive utilities <.SPLRCU> and real estate <.SPLRCR> among the biggest gainers.

Hopes of a resolution to the trade dispute as well as a largely upbeat corporate earnings season have spurred Wall Street to record highs this month, but President Donald Trump recently tempered expectations with the threat of more tariffs if China failed to reach a deal.

Federal Reserve Chair Jerome Powell said the risk of the U.S. economy facing a dramatic bust is remote, in part, because the record-long expansion is notable for not having pockets of overheating activity.

On Wednesday, Powell had said the central bank saw a "sustained expansion" ahead for the U.S. economy.

At 1:22 p.m. ET the Dow Jones Industrial Average <.DJI> was down 35.18 points, or 0.13%, at 27,748.41, the S&P 500 <.SPX> was down 2.15 points, or 0.07%, at 3,091.89 and the Nasdaq Composite <.IXIC> was down 10.63 points, or 0.13%, at 8,471.47.

Dillard's Inc jumped 13.6% as the department store chain beat quarterly comparable-store sales estimates.

Kraft Heinz Co dropped 6.2% after a report that Goldman Sachs had downgraded the food and beverage maker's stock to "sell".

Advancing issues outnumbered decliners for a 1.20-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.15-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and two new lows, while the Nasdaq recorded 58 new highs and 97 new lows.

(Reporting by Arjun Panchadar and Agamoni Ghosh in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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