World Stocks Fall on Cisco Guidance, Ireland Worries; Record in Copper

Bikram Pandey
11 Nov, 2010
New York City

U.S. stocks declined after Cisco Systems guided lower revenues on weaker sales to governments in Japan, Europe and the U.S. European markets fell on the renewed worries that Ireland and other nations may struggle to repay sovereign debts. Copper closed at a record on the inflation worries in China.

[R]4:20 PM New York – U.S. stocks declined after tech stocks fell and dragged the Nasdaq and other broad indexes. Cisco guided lower than expected sales of $10.1 billion on weaker sales to governments in Japan, Europe and the U.S. European markets fell on the renewed worries that Ireland and other smaller nations may struggle to repay debts.[/R]

U.S. stock indexes fell sharply after Cisco Systems guided lower than expected sales in the current quarter. The weak guidance dragged the tech stock heavy Nasdaq down 1.7%.

Cisco in a conference call yesterday said governments in Japan, Europe and state governments in the U.S. are cutting spending to meet the lower budgetary guidelines. With this in mind, Cisco said fiscal second quarter revenues is likely to be around $10.1 billion and adjusted earnings per share is not likely to increase 35 cents a share.

U.S. home seizures declined 9% in October. The gold gained the dollar edged up.

Advance Auto Parts Inc traded higher after the auto parts retailer lifted its annual earnings outlook to between $3.80 and $3.90 a share. Prudential Financial Inc said in a statement that the company is looking to raise as much as $1 billion. Cisco Systems dropped 16% after it estimated slower revenues growth.

European markets came under pressure after investors face significant losses linked to Ireland related debts and bonds. The loss worries quickly extended to other struggling nations including Spain, Portugal and Greece. Siemens AG lifted its dividend. Telefonica SA fell on lower than expected earnings.

UK stocks and broader indexes fell after investors feared that Ireland and other smaller nations may struggle with bonds repayment. Copper prices closed at a record high on the inflation worries in China. Irish bonds yields rose to 9%.

Tokyo stocks advanced for the second day in a row after banks and exporters gained. Resource stocks closed higher after commodities and crude oil advanced. APEC ministers are looking to speed up free trade in the region as they fear world economic slowdown.

Stocks in China region closed higher on the strength in the banking and resource stocks. Rating agency Moody’s lifted China sovereign debt one notch higher after October trade surplus increased. Oil complex stocks closed higher on the prospect of higher fuel prices.

Stock in Mumbai fell. Apollo Tyres plunged 6% after net profit fell 59%. DLF Limited slumped 4% after net profit fell 5%. Nagarjuna Construction declined 1% and net profit rose 35%. Ranbaxy Laboratories slumped 3% and net profit soared 169%. Vardhman Industries gained 4% net profit spurted 116%.

Commodities, Currencies and Yields

Dollar edged up against euro to $1.36 and rose against the Japanese yen to 82.45. One UK pound fetched $1.61.

Crude oil decreased $0.12 to $87.69 a barrel for a front month contract, natural gas edged lower 11.6 cent to $3.93 per mBtu and gasoline increased 0.03 cents to 223.60 cents.

Gold increased $7.60 in New York trading to close at $1,406.90 per ounce, silver increased $0.72 to $27.59 per ounce and copper for the front month delivery increased 6.10 cents to $4.03 per pound.

Yield on 10-year U.S. bond increased to 2.66% and on 30-year U.S. bond yield gained to 4.33%.