On Thursday, a late day rally helped the market to close almost flat following Egyptian President Hosni Mubarak’s speech. Though the President said he was not resigning, Mubarak will delegate powers to the Vice President. Earlier in the day markets fell after network equipment maker Cisco (NASDAQ:CSCO) projected a weak outlook.
The Dow Jones Industrial Average ended the day lower by 10.60 points to 12,229.29. The S&P 500 gained 0.07% to close at 1,321.87. The Nasdaq rose 1.83 points to end the day at 2,790.45. Market breadth was positive as rising shares slightly outpaced falling ones by a small margin. Overall 4.2 billion shares were traded on a consolidated basis.
On the international front, the markets reacted late in the day to Egyptian President Hosni Mubarak’s announcement that he will delegate some powers to the Vice President, bringing cheer to Egyptian protesters. Egypt has been in the limelight for more than two weeks now after civilian unrest had crippled the African nation. The protests had made global investors jittery on fears that the situation would spread to other countries and impact the commodity and energy sectors. Although Egypt isn’t a big oil exporter, the Suez and Sumed pipelines are used to transport roughly 3 million barrels of oil daily.
Coming to economic news, a report from the Labor Department said the labor market was improving as unemployment levels dropped to their lowest in 2-1/2 years. For the week ending February 5, initial claims fell 36,000 to 383,000 beating economists’ expectations. In a separate report, the Commerce Department reported that although demand for products has slowed, wholesale inventories increased for the month of December. Economists are hoping that the increase in wholesale inventories will keep factories busy.
On to earnings and estimates news, networking company Cisco (NASDAQ:CSCO) reported its fourth quarter results late on Wednesday. The networking giant said its income fell 18% due to lower sales to government agencies. Cisco’s shares tumbled 14.16% to close at $18.92. Share prices of Credit Suisse (NYSE:CS) fell 7.2% after the bank reported its fourth quarter earnings results that came short of expectations. Akamai Technologies’ (NASDAQ:AKAM) shares lost 15% after the company said its profits are dwindling because of severe competition forcing price cuts of its products and services. Sprint Nextel (NYSE:S) gained $0.25 cents or rose 5.75% to $4.60 after the company reported improved revenue figures for the fourth quarter, beating analyst’s expectations. PepsiCo’s (NYSE:PEP) shares fell 1.65% to close at $63.36 after the company’s fourth quarter net income declined 5% because of rising costs. Year-over-year, PepsiCo’s net income decreased to $1.37 million from $1.43 million. The company also lowered its guidance for the year.
Coming to news of mergers and acquisitions, a report from Bloomberg said Nokia (NYSE:NOK) and Microsoft (NASDAQ:MSFT) are close to announcing a possible software partnership. However share prices of both the company declined even after this report. Share prices of Nokia and Microsoft fell by 7.25% and 1.68% respectively. Pharmaceutical companies Medicis Pharmaceutical (NYSE:MRX) and Anacor Pharmaceuticals (NASDAQ:ANAC) said the two have signed an R&D agreement which will bolster efforts to discover and produce a potential drug which can be used to treat acne using boron based molecule compounds. According to Reuters, Clearwire (NASDAQ:CLWR) is shifting its sales strategy towards wholesale clients moving away from retail consumer services. Reacting to the news, share prices of Clearwire increased 3.63% to close at $5.71.
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