Investors cautiously bid stocks narrowly higher yesterday, cheered by a recovering dollar and moderating oil prices. Volume was light, however...
NEW YORK — Investors cautiously bid stocks narrowly higher yesterday, cheered by a recovering dollar and moderating oil prices. Volume was light, however, as the market waited for Cisco Systems’ post-session earnings report, which turned out to be disappointing.
The Dow Jones industrial average rose 8.87 to 10,724.63 after closing nearly unchanged in an equally uninspired session Monday.
Microsoft, one of the 30 Dow stocks, edged 8 cents higher to close at $26.24 a share. Boeing, also a Dow stock, jumped $1 to $53.50.
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Broader stock indicators also moved slightly higher. The Standard & Poor’s 500 index was up 0.58 at 1,202.30, while the Nasdaq composite index gained 4.65 to 2,086.68.
The dollar struck a two-month high against the Japanese yen, but fell against the euro after two days of gains, while oil prices hovered near $45 per barrel. A barrel of light crude closed at $45.40, up 12 cents, on the New York Mercantile Exchange.
Wall Street’s focus, however, was on Cisco, and that kept many investors from making large bets during trading hours. The networking giant’s fourth-quarter profits were in line with Wall Street expectations, but its revenues missed analysts’ forecasts, creating worries that demand for technology — and corporate spending overall — was waning.
“Cisco is of course a benchmark, and I think investors are hoping that these earnings will tell them something about the economy,” said Sam Lieber, president of the Alpine Funds. “Still, you have to look at the overall picture. Cisco is a part of that, but it’s not what it used to be.”
Analysts were not alarmed by the rangebound trading, particularly after the market’s relatively strong showing last week following a lackluster January. A little backtracking might be what’s needed for stocks to move forward again, said Todd Clark, head of listed equity trading at Wells Fargo Securities.
“We’ve got some benefit from the recent pullback in crude but we haven’t been able to add to last week’s advance, partly because of the fact that the market has not been performing so well year-to-date, and there’s some reluctance among people who don’t quite believe in the rally,” Clark said. “But overall, I think this is constructive. We’re consolidating last week’s gains and I expect the market will turn higher.”
With little new economic data available this week, earnings reports have taken on additional importance. Cisco’s networking products are practically ubiquitous in most technology settings, and its profit picture was expected to weigh heavily on the sector. Cisco’s net income rose 93 cents from a year ago, but its revenues fell short of expectations.
Shares of Cisco added 8 cents to $18.24 during the session, then retreated 20 cents in electronic after-market trading minutes after its earnings were released.
Shares of semiconductor companies rose after an analyst with SG Cowan said the inventory buildups that have plagued chip makers abated in the fourth quarter.
Dow component Intel rose 50 cents to $23.41, while rival Advanced Micro Devices gained 42 cents to $17.64.