Wall Street advances after weakness, but Cisco drags
NEW YORK (Reuters) - Stocks advanced modestly on Thursday as investors snapped up beaten down shares after a spate of weakness, but a disappointing outlook from tech bellwether Cisco Systems limited gains.
By Chuck Mikolajczak
The latest uncertainty surrounding Greece and the euro zone's sovereign debt crisis helped spark a drop in the S&P 500 in five of the past six sessions, sending the benchmark index down nearly 4 percent. While the region's difficulties persisted, marked by political gridlock in Greece, investors used the market declines as a buying opportunity.
"We were obviously very oversold, so we are due for some type of a snapback rally," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio.
"There is no other reason we are selling off other than continued concerns out of Europe and factoring in the Cisco decline."
The Dow Jones industrial average <.DJI> gained 40.26 points, or 0.31 percent, to 12,875.32. The Standard & Poor's 500 Index <.SPX> added 4.47 points, or 0.33 percent, to 1,359.05. The Nasdaq Composite Index <.IXIC> dropped 5.50 points, or 0.19 percent, to 2,929.21.
The Dow's rise put the blue chip index on pace for its first advance in seven sessions.
The number of Americans applying for jobless benefits edged down last week, offering a glimmer of hope the deterioration in the labor market was easing after April's weak employment growth.
Cisco Systems Inc <CSCO.O> dropped 9.3 percent to $17.04, its biggest percentage drop since February 2011, making it the biggest drag on the Dow, S&P 500 and Nasdaq 100 <.NDX> indexes. The network equipment maker forecast profits below Wall Street estimates. The NYSEArca networking index <.NWX> dropped 2.6 percent.
In positive earnings developments, News Corp <NWSA.O> rose after its profit beat expectations late Wednesday and it announced a $5 billion stock buyback. Shares climbed 4.6 percent to $20.27.
With 449 of the S&P 500 companies reporting results through Thursday morning, 66.4 percent exceeded estimates, according to Thomson Reuters data compared with more than 80 percent at the start of earnings season.
(Reporting By Chuck Mikolajczak; Editing by Kenneth Barry)