Wall Street climbs on strong Cisco results
NEW YORK (Reuters) - U.S. stocks climbed on Wednesday, lifted by strong earnings from technology bellwether Cisco, but equities struggled to hold onto solid gains after a series of weak sessions.
The S&P 500 has fallen 3.8 percent over the previous five trading days, with most of the losses driven by uncertainty over the looming U.S. "fiscal cliff" and concerns about Europe's economic troubles. Trading has been volatile, with positive momentum difficult to sustain.
The index closed below its 200-day moving average for a fourth day in a row on Tuesday, a technical indicator that suggests recent declines could gain momentum.
"We're rebounding a bit today, thanks to the good news from Cisco, but the key will be whether we can hold or if we fade going into the close like we did yesterday," said Paul Nolte, managing director at Dearborn Partners in Chicago. "If we can't hold these gains, the tenor of the market will remain negative."
Dow component Cisco Systems Inc (CSCO.O) reported first-quarter earnings and revenue late Tuesday that beat expectations, sending the stock leaping 7 percent to $18.04. Technology shares .GSPT were the strongest on the day, up 0.7 percent.
The technology sector has been weak lately, dropping almost 10 percent over the past two months on earnings disappointments from Google (GOOG.O) and others. It was the worst-performing sector on Tuesday.
The Dow Jones industrial average was up 7.14 points, or 0.06 percent, at 12,763.32. The Standard & Poor's 500 Index was up 2.90 points, or 0.21 percent, at 1,377.43. The Nasdaq Composite Index was up 13.32 points, or 0.46 percent, at 2,897.21.
Also in earnings news, Abercrombie & Fitch Co (ANF.N) soared 30 percent to $40.82 after reporting a steep rise in its quarterly profit and a full-year forecast that beat analysts' estimates. Staples Inc (SPLS.O) rose 4.4 percent to $11.75 after posting earnings that beat expectations.
Abercrombie, Cisco and Staples made up the top three percentage gainers on the S&P 500. Still, broader trading will likely be partially dictated by macroeconomic issues as investors grapple with the impact of Europe's debt crisis and the U.S. fiscal cliff - a series of large, mandated tax hikes and spending cuts that start to take effect next year.
Analysts say serious fiscal negotiations are still weeks away, but that the failure to reach a deal in Congress could tip the world's largest economy into recession.
Retail sales fell 0.3 percent in October, hurt by the impact of a recent devastating storm in the U.S. northeast. The drop was slightly more than expected but stocks barely reacted to the data. Producer prices fell 0.2 percent in October, compared with expectations for a 0.2 percent rise.
European shares fell 0.4 percent as Greece's unresolved crisis raised questions about the region's potential for economic growth, while anti-austerity strikes across southern Europe added to concerns that fiscal reforms would be politically difficult to implement.
(Editing by Bernadette Baum)
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