- The Washington Times - Tuesday, May 13, 2003

NEW YORK (AP) — A drop in revenue at Cisco Systems unsettled Wall Street yesterday, sending stocks lower as investors also cashed in profits from the market’s recent earnings-driven rally.

“It’s part Cisco and it is partially a profit-taking pit stop,” said Alan Ackerman, executive vice president of Fahnestock & Co. “We have a market that’s moved up on heavy volume that has indicated to people that we are seeing more of a commitment of funds to the market.”

The Dow Jones Industrial Average closed down 27.73, or 0.3 percent, at 8,560.63.

The broader market also pulled back. The Nasdaq Composite Index fell 16.95, or 1.1 percent, to 1,506.76. The Standard & Poor’s 500 index declined 4.77, or 0.5 percent, to 929.62.

Some slippage was to be expected after weeks of rallies on Wall Street as investors welcomed news that corporate profits were surprisingly strong. Before companies began reporting results for the first three months of 2003, many investors feared another round of disappointing numbers, this time owing to the buildup to war in Iraq.

Riskier bets, such as stock in smaller companies or technology firms, have been enjoying the biggest gains. In three weeks, the Nasdaq climbed 12 percent, while the Dow rose 4.7 percent and the S&P; gained 7.6 percent.

Yesterday, Cisco fell 40 cents to $15.50 a day after reporting disappointing revenue in its latest quarter. While Cisco said its fiscal third-quarter earnings were a penny a share higher than Wall Street predicted, its revenue declined and the networker said revenue will be flat in the current quarter.

Downbeat earnings news pulled other individual stocks lower. Lamar Advertising fell $1.78 to $34.48 after reporting a first-quarter loss that was 4 cents larger than analysts anticipated.

Amylin Pharmaceuticals declined $1.16 to $18.49 on a first-quarter loss that was a penny bigger than expected.

But publisher R.R. Donnelley advanced $1.67 to $22 on first-quarter profits that beat analysts’ expectations by 6 cents a share.

And Coca-Cola rose $2.25 to $43.27 after Morgan Stanley upgraded the company to “overweight” from “equal-weight.”


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