Cisco's lowered guidance was no help for a market already worried about the prospect of a deep recession.
A dramatically lowered sales outlook from Cisco Systems (NASDAQ: CSCO) and fears of a prolonged recession sent stocks plunging on Thursday, for a two-day loss of about 10% for the major stocks indexes.
Traders were also bracing for Friday's monthly employment report, which is expected to show a loss of 200,000 jobs for October in the wake of a credit market meltdown that began in mid-September. Also weighing on stocks were some dismal retail sales reports and dramatic interest rate cuts in Europe that seemed to worry investors more than put them at ease.
But even though the major indexes were off by more than 4% on the day, Cisco shares fell only 2.6%, as traders were somewhat heartened that the company's in-line results for the October quarter included six weeks of the credit market crisis that began with the bankruptcy of Lehman Brothers in mid-September.
Intel (NASDAQ: INTC) lost 8% on gloomy comments about the economy from CEO Paul Otellini, sending the chip sector (PHI: SOX) 7.1% lower.
But Yahoo (NASDAQ: YHOO) escaped the sell-off on speculation that the company could find itself back in the arms of Microsoft (NASDAQ: MSFT) after its partnership plans with Google (NASDAQ: GOOG) fell apart.
Global Crossing (NASDAQ: GLBC) gained 17% on news that it turned cash flow positive.
Tech stocks with big losses on the day included AMD (NYSE: AMD), which fell 10.7%, Research in Motion (NASDAQ: RIMM), down 9.5%, Applied Materials (NASDAQ: AMAT), down 12.6%, and Nvidia (NASDAQ: NVDA), off 10.5%. After the close, Nvidia shares jumped after the company's results topped expectations.
The Nasdaq lost 72 to 1608, the S&P 47 to 904, and the Dow tumbled 443 to 8695. Volume rose to 6.2 billion shares on the NYSE, and 2.43 billion on the Nasdaq. Decliners led by a 29-6 margin on the NYSE, and 22-6 on the Nasdaq. Downside volume was 95% on the NYSE, and 90% on the Nasdaq. New highs-new lows were 8-175 on the NYSE, and 5-186 on the Nasdaq.
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