Wall Street slips after Cisco's gloomy outlook

By Lewis Krauskopf (Reuters) - Wall Street's main indexes slipped from near record levels on Thursday, as a dour forecast from tech stalwart Cisco Systems raised fresh questions about the global economy's health and overshadowed a strong report from big box retailer Walmart. Cisco shares tumbled 7.8% after the network gear maker forecast second-quarter revenue and profit below expectations as increasing global economic uncertainties kept clients away from spending more on its routers and switches.

Reuters November 15, 2019 02:06:49 IST
Wall Street slips after Cisco's gloomy outlook

Wall Street slips after Ciscos gloomy outlook

By Lewis Krauskopf

(Reuters) - Wall Street's main indexes slipped from near record levels on Thursday, as a dour forecast from tech stalwart Cisco Systems raised fresh questions about the global economy's health and overshadowed a strong report from big box retailer Walmart.

Cisco shares tumbled 7.8% after the network gear maker forecast second-quarter revenue and profit below expectations as increasing global economic uncertainties kept clients away from spending more on its routers and switches.

Cisco's share decline weighed the most on the major indexes and helped drag the technology sector <.SPLRCT> down 0.3%.

In contrast, Walmart raised its annual outlook and the world's largest retailer posted better-than-expected earnings, comparable sales and e-commerce growth in its largest market during the third quarter.

Walmart shares fell 0.8% after hitting a record high earlier in the session, but the S&P 500 retail <.SPXRT> and consumer discretionary <.SPLRCD> indexes were higher after company's report.

“We have on display this front-end of the economy, the U.S. consumer, that remains resilient and remains in a healthy place in front of a very key holiday spending timeframe for the economy," said Margaret Reid, senior portfolio manager at The Private Bank at Union Bank in San Francisco.

That compares, Reid said, to "the back-end of the economy that still seems to be plagued and weighed by U.S.-China trade and global economic and political volatility."

The Dow Jones Industrial Average <.DJI> fell 36.93 points, or 0.13%, to 27,746.66, the S&P 500 <.SPX> lost 1.41 points, or 0.05%, to 3,092.63 and the Nasdaq Composite <.IXIC> dropped 12.35 points, or 0.15%, to 8,469.76.

Stocks have recently run to all-time highs, with the Dow and the S&P 500 posting record closing levels on Wednesday, helped by the Federal Reserve's interest rate cuts, third-quarter earnings topping low expectations and signs the economy may be bottoming.

Fed Chair Jerome Powell on Thursday said the risk of the U.S. economy facing a dramatic bust is remote, and investors will next be looking to U.S. retail sales data on Friday to gauge the health of the economy.

On Thursday, real estate <.SPLRCR> was the top-performing S&P 500 sector, rising 0.5%, while energy <.SPNY> and consumer staples <.SPLRCS> lagged along with tech.

Dillard's Inc shares jumped 14.8% after the department store chain's quarterly results.

Advancing issues outnumbered declining ones on the NYSE by a 1.20-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favored decliners.

The S&P 500 posted 23 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 64 new highs and 105 new lows.

(Additional reporting by Arjun Panchadar and Agamoni Ghosh in Bengaluru; Editing by Nick Zieminski)

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

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