Tech stocks could add to Monday's gains as Wall Street awaits Cisco's third quarter results. Asia declined and Europe was at a standstill. The Dow is set to open essentially unchanged.
Cisco Systems Inc. (Nasdaq: CSCO), which makes the hardware that is used by almost every company that uses the Internet, is set to report results after the bell today - which could carry the tech sector as a whole higher on Tuesday.
The San Jose, Calif.-based data networking company, with such a large number of companies using its equipment to tap the Web, can be used as an indirect gauge for how businesses perceive the Internet as a place to do business.
Strong sales from Cisco mean more companies are expanding onto the Internet or broadening their presence on the Web. While the Internet is not a road paved with gold, some companies will succeed online. Keep an eye on Cisco to keep the monitor the overall health of the Web as a venue for business.
Watch for these stocks to be among Tuesday's most actively traded issues: Ariel, Cisco, Intel, Microsoft, Motorola, Network Associates, TheStreet.com, Value America and Voicestream.
On Monday, investors grabbed some big-name hardware stocks at bargain prices. The Nasdaq picked up 23 points to close at 2,526.40 while the Dow fell 24 points to end at 11,007.25.
The Inter@ctive Week @Net Index climbed 11 to 320 on Monday.
At the Bell
The Dow Jones industrial average is set to open flat. The Standard & Poor's 500 index for March futures contracts dropped 1.3 points to 1,345.7 at 7:33 a.m. EST in 24-hour electronic trading, are indicating a 10-point decline in the global bellwether.
Asia was sent lower after Korea's banking watchdog threatened to fire executives at its largest banks. The Nikkei 225 in Tokyo dropped 1.38 percent to 16,743, the Seoul composite in South Korea fell 4.03 percent to 781, Singapore's Strait Times index added 1.42 percent to 1,888 and Hong Kong's Hang Seng declined 2.19 percent to 12,874.
Korea's Financial Supervisory Commission threatened to sack executives at some of its largest banks after the industry group failed to reform its failing banks -- getting them pledge to cut debt and sell assets.
Also in Korea, Hyundai Motor plans to raise about $1.6 billion by selling new stock this year to raise the funds needed to buy Kia Motors.
It was bad news for Japanese chipmakers, as it looks as though they won't return to profitability this year. The memory chip market is slipping again, which will further delay recovery of the overall semiconductor market and its producers. Memory chips are used in PCs, among other electronics. NEC Corp. (Nasdaq: NIPNY), Hitachi Ltd. (NYSE: HIT) and Fujitsu Ltd. (Nasdaq: FJTSY) all sank on Tuesday.
When Korean memory chipmakers cut production last year, things began to look up for Japan's market, as prices began to settle out. However, a ramp up in production at Micron Technology Inc. (NYSE: MU) and some of its Taiwan counterparts have spurred chip prices lower once again.
European markets were essentially unchanged. London's FTSE 100 rose 0.1 percent to 6,354, the CAC 40 in Paris dipped 0.1 percent to 4,342 and the Xetra DAX in Frankfurt lost 0.13 percent to 5,354 at 7:42 a.m. EST.
There was a mixed outlook for Europe as its biggest companies reported results. Adidas-Salomon AG, the world's second largest sporting goods maker, reported a 38 percent drop in first quarter sales, and Henkel AG, a large German chemical maker, also warned of lower earnings. Oil stocks lost some ground after BP Amoco posted a 41 percent decline in first quarter profit.
On the positive side, utilities Veba AG and Vivendi SA reported strong quarterly results and expect both expect earnings and sales to continue to grow as expected.