Walmart, Cisco woes send Dow negative
The S&P 500 and the Nasdaq managed to eke out gains on Thursday while the Dow Industrial Average ended slightly lower with pressure from tech and retail bellwethers Cisco and Walmart after disappointing forecasts. Shares of Cisco Systems tumbled 9.8 percent as the communications and networking technology company cut its full-year revenue and profit forecasts on slowing demand for its networking equipment. Also in technology, Palo Alto Networks shares fell 5.4 percent after its forecast late Wednesday for second-quarter billings missed expectations. Walmart shares sank 8.1 percent a day after touching a record high. The retail giant said US consumers were spending cautiously because of inflation, even as it raised its annual forecast for sales and profit. Also, Target fell 0.4 percent, giving back some gains from the previous session in which it soared 17.8 percent after providing a bullish strong holiday-quarter outlook. Earlier this week, Wall Street indexes had rallied sharply with data signaling cooling US inflation and fueling hopes the US Federal Reserve is done hiking interest rates. Also, passage this week of a stop-gap bill to avert a government shutdown eased some nerves. Given that Cisco and Walmart are "a backbone of their respective industries", Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest said their weakness "calls a little bit into question the health of the consumer and maybe the health of the technology sector." But others noted positive counter forces in Thursday's session, with gains in megacaps including Microsoft, Apple and Nvidia. "The major indexes are pretty much flat on the day, but you're still seeing a lot of strength in big-cap tech or growth. It's just a continuation of the positive narrative we've seen in the market recently," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. Specifically, Ghriskey cited investor relief that the Federal Reserve appears to be done with its rate hiking cycle. Earlier, a Labour Department report showed weekly jobless claims had risen more than expected, cementing bets that the Fed will not need to raise rates further. The Dow Jones Industrial Average fell 0.13 percent, to 34,945, the S&P 500 gained 0.12 percent, to 4,508 and the Nasdaq Composite added 0.07 percent, to 14,114. (Reuters)