Techs ascend on hope for rate cut
Technology stocks trade flat as investors digest Microsoft's antitrust settlement and bleak economic news about unemployment and factory orders.
The Dow Jones industrial average gained 117.49 to 9,441.03, and the Nasdaq composite index rose 47.92 to 1,793.65. CNET's technology indexes all gained ground, led by the storage index, up almost 8 percent.
Technology stocks were flat Friday as investors digested Microsoft's antitrust settlement and bleak economic news about unemployment and factory orders.
Late Monday, Cisco reported a net loss of $268 million, or a loss of 4 cents per share. Excluding charges, the network-equipment maker reported a profit of $332 million, or 4 cents per share, on revenue of $4.4 billion. Cisco's one-time acquisition charge totaled $37 million, or less than 1 cent per share on an after-tax basis. Shares rose in after-hours trading.
On Monday, investors reacted to another economic indicator: the National Association of Purchasing Management's October report on the services sector. Nonmanufacturing business fell to 40.6 in October from 50.2 in September, according to the report. The number was lower than the economists' estimate for a reading of 46.4. Any reading below 50 indicates a contraction in business.
The report is the last economic report investors will get before the Federal Reserve policy meeting Tuesday, when the Fed is widely expected to slash interest rates. The Federal Reserve has already made nine cuts to interest rates this year.
"We believe that the Fed has little choice but to cut rates 50 (basis points) again at tomorrow's Federal Open Market Committee meeting," said Peter Hooper, an analyst at Deutsche Banc Alex Brown.
In the technology arena, Microsoft's antitrust settlement is continuing to stir up controversy.
Microsoft was up $1.87 to $63.27 with the latest twist in its antitrust trial. Just when the software giant's legal issues seemed to be resolved, state antitrust enforcers agreed late Sunday to ask for changes on a dozen specific points in the proposed settlement. Friday, an agreement between Microsoft and the Justice Department seemed to bring an end to the 3-year-old antitrust case, though several details of the deal left room for contention.
Among other actively traded shares, EMC rose $1.41, or 12 percent, to $14.50; Sun Microsystems rose 62 cents, or 5 percent, to $12.06; Intel rose 68 cents to $26.96, and Oracle rose 51 cents to $14.96.
AOL Time Warner gained $1.48 to $14.96. Yahoo rose $1.03 to $11.99, and Amazon.com was up 28 cents to $6.99.
Staff and Reuters contributed to this report.