TECH STOCKS: Cisco Still Hurting In Emerging Markets

By Benjamin Pimentel, MarketWatch

Cisco Systems is still wrestling with soft demand in emerging markets in what a J.P. Morgan analyst says is looking like "an exceptionally weak" quarter for switches.

Cisco shares (CSCO) shed 0.5% to close at $22.99 on Wednesday after J.P. Morgan analyst Rod Hall reiterated an underweight rating on the stock saying he continues to "expect the negative macro backdrop in major emerging markets," which represent roughly 8% of the networking giant's revenues.

Hall did note that "currency movements are less a headwind in the current quarter than they have been," which he said "may help Cisco make numbers in what otherwise looks like an exceptionally weak switching quarter."

Cisco shares were the worst performer on the Dow Jones Industrial Average (DJI), which was up 40 points.

The tech sector also was weighed down by shares of Twitter Inc.,(TWTR) which were down 2.7% to close at $45.73, Intel Corp.(INTC), which shed 0.4% to close at $25.89 and IBM Corp., (IBM) which slipped 0.5% to close at $193.55.

But the Nasdaq Composite Index (RIXF) edged higher by 0.2% to close at 4,276, even as the Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia Semiconductor Index(SOX) were each down a fraction.

Facebook (FB) was up 0.2% to close at $63.72 after WhatsApp said Tuesday that it just handled a record 64 billion messages in a single day. Facebook recently bought the popular messaging app for about $19 billion.

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