Dow advances 57, Nasdaq
slips 6; Cisco matches
analysts’ forecasts

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Associated Press

Wall Street traded tentatively today, with investors bidding blue chips moderately higher but selling technology issues on another string of semiconductor downgrades and apprehensiveness over Cisco Systems' earnings report that was due out after the market closed.

The Dow Jones industrial average rose 57.43 to 10,458.74. The Dow, which traded in a 113-point range, won back more than half of the 111 it lost yesterday.

The broader market was mixed. The Nasdaq composite index, which traded in a 30-point range, fell 6.48 to 2,027.78. The Standard & Poor's 500 index rose 3.92 to 1,204.40.

Cisco, the heaviest-traded Nasdaq stock today, fell 28 cents to $19.26 before announcing earnings that met analysts' expectations despite fourth-quarter earnings plunging 99 percent.

For the three months ended July 28, the networking giant earned $7 million, barely breaking even, compared with profits of $796 million, or 11 cents a share, in the same period last year.

Excluding items and goodwill, the company earned $163 million, or 2 cents a share, compared with $1.2 billion, or 16 cents a share, in the same period last year.

Analysts were expecting a profit of 2 cents per share, according to a survey by Thomson Financial/First Call.

Revenue for the fourth quarter was $4.30 billion, a 25 percent decrease from the $5.72 billion in the same period last year but on par with analyst expectations.

Analysts were seeking guidance for any sign Cisco in particular -- and the telecom- munications industry in general -- might be bottoming out from its months long slide, though the company declined to do so.

Meanwhile, advancers outnumbered decliners 8 to 7 on the New York Stock Exchange, with 1,702 up, 1,383 down and 232 unchanged. Volume was 969.27 million shares vs. 814.78 million yesterday.

The NYSE composite index rose 2.37 to 612.50, the American Stock Exchange composite index edged up .04 to 883.02 and the Russell 2000 index, which measures the performance of smaller company stocks, slipped 0.63 to 480.33.

The Treasury's 10-year note fell 3/32 to 983/4; its yield rose 1 basis point to 5.17 percent. The 30-year bond fell 3/32 to 9625/32; its yield rose 1 basis point to 5.60 percent.

Investors who have been yearning for concrete proof that business is improving half-heartedly welcomed a report that American workers' productivity rebounded in the second quarter for its best showing in a year.

"Productivity helped. But can you go the distance? That's what Wall Street is asking," said Larry Wachtel, market analyst at Prudential Securities.

Wachtel noted that recent economic data has been mixed, challenging the market to keep any gains, and that thousands of layoffs in July contributed greatly to the rise in productivity.

As long as the economic outlook is murky, the stock market will continue to narrowly fluctuate, analysts said.

"There is nothing that is going to happen in the month of August that is going to grab you by the lapels and say, 'This is it,"' Wachtel said.

The tech sector came under pressure after Credit Suisse First Boston downgraded a handful of semiconductor stocks, saying that companies will continue to work off excess inventory through next year and that demand will remain low. Novellus Systems dropped $2.47 to $49.81 and Applied Materials fell $1.93 to $46.80.

"We believe valuations have gotten ahead of fundamentals, and investors should take profits," said CSFB in a research note.