Mid-Day Update: Stocks Still Sunk on Cisco; Investors Watching Developments at G20 Summit

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Here's where markets stand at mid-day:

-NYSE down 38.97 (-0.5%) to 7,708.49

-DJIA down 83.25 (-0.73%) to 11,273.79

-S&P 500 down 7.57 (-0.62%) to 1,211.19

-Nasdaq down 27.74 (-1.08%) to 2,550.87

GLOBAL SENTIMENT

Hang Seng up 0.82%

Nikkei up 0.31%

FTSE down 0.03%

MID-DAY NYSE INDEX WATCH

NYSE Energy up 0.03% at 11,902.86

NYSE Financial down 1.04% at 4,862.47

NYSE Health Care down 0.39% at 6,433.90

NYSE Arca Tech 100 down 1.07% at 1,037.60

UPSIDE MOVERS

(+) CXDC (+3.8%) beats Q3 estimates.

(+) IR (+3.7%) to be added to S&P 500.

(+) LVLT (+10.7%) inks video streaming deal with Netflix.

(+) OPTC (+49.6%) sold to TKH Group.

(+) DNDN (+5.8%) submits post-approval supplement for provenge BLA for manufacturing facility.

(+) SI (+1.7%) hikes dividend, issues improved results.

DOWNSIDE MOVERS

(-) CSCO (-15.3%) issues sales warning.

(-) FLEX (-2.2%), JBL (-7.0%) downgraded in wake of CSCO results.

(-) AA (-0.6%) downgraded.

(-) JBLU (-1.2%) downgraded.

(-) YHOO (-1.4%) receives Neutral rating as Macquerie initiates coverage; GOOG also slips despite upbeat coverage.

(-) CNAM (-12.6%) withdraws 2010 guidance due to more rolling blackouts.

MARKET DIRECTION

Stocks are solidly lower at mid-day as investors react to a disappointing outlook from Cisco Systems ( CSCO ), renewed concerns over sovereign debt in Europe, which is pushing the dollar higher, and warning signs out of China about inflation.

Investors are also eying the Group of 20 Summit in South Korea where world leaders are trying to develop plans to bolster a generally weaker global economy amid allegations of currency manipulation and widening trade gaps.

The U.S. bond market and government offices are closed today for the Veterans Day holiday; no economic data are due.

Yesterday, a disappointing report -- its outlook in particular -- from tech mainstay Cisco Systems, tipped stocks lower this morning. Cisco reported Q1 sales of $10.75 billion, just ahead of the analyst mean for $10.74 billion on Thomson Reuters. EPS were $0.42, two cents better than expectations. But the company expects Q2 revenue growth to increase 3% to 5% year-over-year. The Street is at 13% revenue growth. For 2011, the company expects revenue growth in the 9% to 12% range.

Meanwhile, Google ( GOOG ) said it is not working on a social networking site to compete with Facebook, Reuters reported, citing a comment from a company executive. "We're not working on a social network platform that's just going to be another social network platform," said Hugo Barra, head of Google's mobile product development at the Monaco Media Forum. Google currently owns another social network called Orkut, which is popular in India and Brazil.

Level 3 Communications ( LVLT ) announced that it has been selected to serve as a primary content delivery network (CDN) provider for Netflix ( NFLX ). It will support the company's streaming functionality and support storage for the entire Netflix library of content. As a result of the deal, Level 3 has accelerated plans to further invest in its CDN capacity. Level 3 will double its storage capacity and add 2.9 Terabits per second (Tbps) of globally available CDN capacity, which is in addition to the 1.65 Tbps that was deployed in the third quarter of 2010.

Wal-Mart Stores Inc ( WMT ) is down after the retailer announced it will waive shipping fees on 60,000 items in its online catalog for the holiday season. The company will also offer free return shipping as well until Dec. 20. Concern is growing that rival retailers will also be forced to make a similar move to lure cost-conscious consumers.

MetLife ( MET ) says it plans to stop the sale of new long-term care coverage after citing "financial challenges" in its business, according to a Bloomberg report. MetLife is looking to focus on growth in Asia after it purchased a business from American International Group ( AIG ) earlier this month for $16.2 billion, the report said.

Activision Blizzard ( ATVI ) said "Call of Duty: Black Ops"--it's latest installment of the "Call of Duty" game series--generated $360 million in sales in North America and the U.K in 24 hours, Bloomberg reported. The figure is a record for any entertainment property, the report said. Demand for the new game outstrips the previous record of $310 million from the previous version of the "Call of Duty" game, the report said.

Baker Hughes ( BHI ) shares are down after the company's chief financial officer said that while demand for oilfield services is growing outside of North America, sufficient capacity has prevented companies from raising prices, Reuters reported. Still Baker Hughes has watched its revenues and profits grow, largely due to increasing activity in North America, the report said.

In recent earnings news:

--SurModics Inc ( SRDX ) is down after the drug delivery technology company turned swung to the red in the fourth quarter and offered a weak outlook for the current fiscal year.

--Rosetta Stone Inc ( RST ) is down sharply after the language learning software group swung to the red in the third quarter as revenue fell.

--Shiner International ( BEST ) is higher after reporting that Q3 sales rose 79.2% year-over-year to $15.5 million. It earned a nickel per share, up from a penny a year ago. It continues to project revenues of $53 million and net income of $0.17 per diluted share, for 2010.

Also today, the Organization of Petroleum Exporting Countries bumped up its 2011 forecast for global oil demand by 1.2 million barrels a day to 86.95 million barrels next year, Bloomberg reported. That's 120,000 barrels a day more than last month's forecast.

Commodities are modestly higher. December gold contracts are up $6, or 0.41%, to $1,405 an ounce while January crude contacts are up 0.10%, or $0.09, at $87.92 a barrel.

In energy ETFs, the United States Oil Fund ( USO ) is down 0.32% to $37.92 and the United States Natural Gas fund ( UNG ) is down 2.05% to $5.73.

In precious metal ETFs, the SPDR Gold Trust ( GLD ) is up 0.15% to $137.45. Market Vectors Gold Miners ( GDX ) is down 0.16% to $61.21. iShares Silver Trust ( SLV ) is up 0.56% to $26.87.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


This article appears in: Investing , Commodities


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