Cisco's decision to buy Cerent Corp. for what is reported to be the highest price ever paid for a private tech firm should rock techs and networking stocks Thursday. Asia and Europe were mixed, and the Dow is set to open lower.
Cisco Systems, the world's biggest maker of Internet equipment, reportedly agreed to buy two closely held companies for $7.4 billion in stock. Its bid of $6.9 billion for Cerent, and $500 million deal to buy Monterey Networks are moves to position the company for competition with big phone-equipment makers such as Lucent Technologies, (Nasdaq: LU) Nortel Networks (NYSE: NT) and Alcatel (NYSE: ALA).
The markets will also have more economic data to piece together, as the Commerce Department will issue another reading on second-quarter gross domestic product before the market opens Thursday. Analysts polled by Reuters expect the revised annual growth rate will be 1.8 percent, less than the initial 2.3 percent.
The Labor Department will release its weekly jobless claims report. Analysts anticipate that claims will have risen to 291,000 for the week ended Aug. 20, from 287,000 the previous week.
The release of minutes from the Federal Open Market Committee's June 29-30 meeting will also give investors another chance for inflation speculation.
Expect the following technology stocks to be among Thursday's most actively traded issues: Cisco Systems Inc. (Nasdaq: CSCO), Etec Systems Inc. (Nasdaq: ETEC), Fatbrain.com Inc. (Nasdaq: FATB), Intuit Inc. (Nasdaq: INTU), J.D. Edwards & Co. (Nasdaq: JDEC), Komag Inc. (Nasdaq: KMAG), and New Era of Networks Inc. (Nasdaq: NEON).
Technology stocks gained ground again Wednesday, sending the Nasdaq composite up 53 points to 2,805.63. The Dow closed up 43 points to finish at another record close of 11,326.04.
At the Bell
The Dow Jones industrial average may open about 41 points lower. The Standard & Poor's 500 index for June futures contracts was down 5.0 points to 1378 at 7:35 a.m. EST in 24-hour electronic trading.
The Inter@ctive Week @Net Index rose 11.12 to 307.48.
Asian markets edged up, with the exception of the Nikkei 225, which fell 1.06 percent to 17,666. Singapore's Strait Times index gained 1.23 percent to 2,163 and Hong Kong's Hang Seng rose 0.96 percent to 13,608.
European markets were also mixed. London's FTSE 100 rose 0.45 percent to 6,398. The CAC 40 in Paris slipped 0.22 percent to 4,619 and the Xetra DAX in Frankfurt was up 0.07 to percent to 5,404 at 6:50 a.m. EST.
Reuters contributed to this report.