1:30pm (EST)
The bulls are holding their gains and are pushing the market higher as we head into the second half of trading. Better-than-expected earnings from Tech and an in-line jobs report have helped fuel today’s bounce.
Initial Claims came in at 395,000 versus estimates for 405,000 and below the critically watched 400,000 level. Continuing claims were slightly below expectations at 3.69 million. Elsewhere, the Commerce Department reported the U.S. Trade Balance showed a deficit of $53 billion, versus a forecast for $48 billion.
Cisco Systems (CSCO, $15.97, up $2.24) is trading higher and is up 16% after announcing earnings last night. The company reported a profit of $1.97 billion, or 40 cents a share, versus $1.9 billion, or 33 cents a share, in the year ago period. Revenue came in at $11.2 billion, up from $10.8 billion.
The suit-and-ties were looking for 38 cents on sales of $11 billion.
Shares were up nearly a buck in after-hours trading last night and with shares up today, it looks like a good quarter. But was it? Cisco did a lot of cost cutting but gross margins were lower. Cisco said sales are expected to grow 1%-4% for the quarter versus last year numbers but that equates to just $10.86-$11.18 billion which is BELOW the just reported quarter.
We still like the stock because we believe Cisco will be at $20 again. It might take a 6months to a year or two but that is a small wait to make 40%-50%. Cisco is also a great stock to write covered calls with and has been a current recommendation in our Weekly Wrap Portfolio since March.
As we head to press, the Dow is up 351 points to 11,071 while the S&P is higher by 41 points to 1,161. The Nasdaq is sporting a gain of 88 points and is at 2,469.
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