US stocks poised to rebound as Cisco helps tech

NEW YORK - US stock futures climbed on Wednesday after stronger-than-expected quarterly results from network equipment maker Cisco Systems Inc.

By (Reuters)

Published: Wed 9 Aug 2006, 8:02 PM

Last updated: Sat 4 Apr 2015, 2:09 PM

Shares were set to rebound from Tuesday’s decline on worries about a slowing economy, worries that the Federal Reserve reinforced in comments accompanying a decision to pause in raising interest rates.

Cisco, the world’s top maker of routers and switches that direct Internet traffic, on Tuesday reported stronger-than-expected quarterly earnings and revenue, sending its shares up 9.4 percent to $18.91 before the bell on the Inet electronic brokerage.

“Cisco is definitely the driver on the tech side,” said Barry Ritholtz, fund manager at Ritholtz Capital Partners in New York. “Not only were their numbers good, but their guidance was pretty strong... The question is, is this a bounce, or is this going to have any legs?”

Standard & Poor’s 500 futures rose 4.5 points, above fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures were up 43 points, and Nasdaq 100 futures advanced 9 points.

But a sign of weakness in housing and other corporate developments could keep gains in check.

Toll Brothers Inc., the largest US luxury home builder, said new orders and revenue fell in the quarter just ended, prompting the company to further reduce the number of homes it expects to build this year.

“Toll Brothers is far more representative of the economy, and that’s going to be an issue,” Ritholtz said. The home builder’s shares fell 2.2 percent to $26 in light trading on Inet.

News Corp. will also be in focus. The media conglomerate reported quarterly revenue broadly in line with forecasts, and its stock slipped 1.4 percent to $19.90 after the bell on Tuesday.

Investors were expecting earnings from Walt Disney Co. and Federated Department Stores Inc. on Wednesday.

On the economic data front, a report from the Mortgage Bankers Association showed US mortgage applications rose for the first time in four weeks. US wholesale inventories are due at 10 a.m. (1400 GMT).