Cisco and RiM Lift Tech Stocks

123jump.com Staff
21 Feb, 2008
New York City

U.S. stocks opened higher on revised sales forecast from Research in Motion and a recommendation to buy Cisco from Citigroup. Tech heavy Nasdaq rose as high as 0.7% after Cisco added 2% and RiM soared 7%. Citigroup also downgraded Target to Sell on weak credit card balance conditions and worries related to economic downturn. Initial claims of unemployment at the end of the last week fell 9,000.

[R]10:00AM New York – U.S. stocks open higher lifted by Research in Motion and Cisco.[/R]

U.S. stock market indexes opened higher as European markets traded higher in the afternoon. A recommendation to buy Cisco stock lifted tech and other large stocks at the opening.

News on Economy

According to the Labor Department, for the week ending Feb.16, preliminary seasonally adjusted initial claims of unemployment was 349,000, a decrease of 9,000 from the previous week''s revised level of 358,000. The 4-week moving average was 360,500, an increase of 10,750 from the previous week''s revised average of 349,750.

The Conference Board is expected to release its data on index of leading economic indicators in January. The index is used by economists to decipher the direction of the economy. Index declined 0.2% in December and is likely to show another decline in January.

The Philadelphia Federal Reserve Bank is expected to release its index of general economic conditions for this month. The index showed a reading of negative 20.9 in January.

Market Movers

Cisco ((CSCO)) jumped 2% or 76 cents to $23.96 after Citigroup analyst revised rating on the company to ‘buy’ from ‘hold’ on valuation and reasonable earnings expectations. Another analysts at Citigroup downgraded retailer Target Corp ((TGT)) on lower than expected profit at its credit card unit. Recent earnings from Wal-Mart also prompted competition in a declining economy and rising energy costs. Target stock fell 35 cents to $53.04.

Research in Motion ((RIMM)) soared $9.60 to $107.50 after it lifted its estimate of the Blackberry unit sales to 2.18 million units from 1.82 units and estimated total of 14 million subscribers in the quarter.

Earnings News

J C Penney ((JCP)) added $1.55 or 3% to $49.50 after reporting fourth quarter earnings. Third largest department store retailer reported operating income of $729 million and earnings from continuing operations of $1.93 per share for the fourth quarter of 2007.

Total sales in the fourth quarter decreased 4.1% compared to last year’s 14-week period, while comparable store sales decreased 2.3%.

Earnings per share declined 7.7% to $1.93 from $2.09 or net income fell to $430 million from $477 million.