Cisco Systems Inc.'s (Nasdaq: CSCO) unexpectedly positive earnings report on Tuesday set the table for a sharp rally in the technology and telecommunications sectors this morning (see
Cisco Tops Expectations).
A day after touching near its all-time low, the Light Reading Index closed up 19.46 (14.4%) to 154.00.
The Nasdaq was chipper today as well; it climbed 122.47 (7.7%) to close at 1696.29, while the Dow rose 305.28 (3.1%) to close at 10141.83.
At the Networld+Interop trade show in Las Vegas today, Cisco CEO John Chambers was animated as he called the green-glowing stock tickers running during his keynote speech "a real pretty sight" (see
Cisco's Chambers Glows at N+I).
Cisco's stock closed up 3.19 (24%) to 16.27. This marks the first time Cisco shares have finished the day above the $15 mark since April 19.
The Light Reading Index is still down overall for the year, having lost more than 29 percent of its value since January 2. Today, however, every stock on the index was in positive territory, with
Digital Lightwave Inc. (Nasdaq: DIGL) and
Extreme Networks Inc. (Nasdaq: EXTR) reporting one-day gains of more than 30 percent.
Other big gainers included the communications chip players, which supply Cisco:
Vitesse Semiconductor Corp. (Nasdaq: VTSS) rose 1.33 (27.88%) to 6.10;
Advanced Micro Devices (NYSE: AMD) jumped 1.48 (26.43%) to 7.08; and
PMC-Sierra Inc. (Nasdaq: PMCS) leaped 3.01 (23.17%) to 16.00.
Many of Cisco's competitors scored sympathetic gains. Extreme Networks closed up 2.23 (30.01%) to 9.66;
Foundry Networks Inc. (Nasdaq: FDRY) was up 0.77 (15.84%) to 5.63; and core routing rival
Juniper Networks Inc. (Nasdaq: JNPR) closed up 1.19 (14.12%) to 9.12, only a day after hitting an all-time low (see
What's Eating Juniper's Stock?).
The storage-area networking sector was also strong.
QLogic Corp. (Nasdaq: QLGC), which is not in the LR Index (but maybe should be), issued a pleasant earnings report of its own (see
QLogic Turns In 'SANtastic' Results), and its shares rocketed up 10.24 (26.76%) to 48.50. LR Index company
Brocade Communications Systems Inc. (Nasdaq: BRCD) popped 5.15 (25.88%) to 25.05.
Though Cisco made it clear that it will see little if any growth in the coming quarters, the company did say that its enterprise business appears to be stabilizing, while business was strong in selected vertical markets. This doesn't at all signal that telecom carriers will start writing checks anytime soon, but investors wouldn't let their enthusiasm be dampened.
— Phil Harvey, Senior Editor,
Light Reading http://www.lightreading.com
