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Stocks End Day Flat As Cisco Weighs on Market

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11/14/2019 | 04:43pm EST

By Michael Wursthorn and Caitlin Ostroff

Major U.S. stock indexes finished the day near where they ended Wednesday after a disappointing forecast from Cisco Systems sent shares of the networking giant sharply lower.

Cisco shares slid 7.3%, the stock's biggest pullback in roughly three months, after the company said late Wednesday that it expects to book its first quarterly revenue decline in more than two years. The networking giant, considered a proxy for corporate high-tech hardware demand, blamed lighter customer spending for the lackluster outlook.

Investors also contended with signs of ongoing friction between the U.S. and China, as the two sides haggle over agriculture purchases, The Wall Street Journal reported Wednesday. That gave investors little enthusiasm to buy riskier assets, such as stocks, and instead encouraged more buying of haven assets, including gold and U.S. Treasurys, analysts said.

"Investors need to see something that they're comfortable with on the trade front," said Mike Bailey, director of research at FBB Capital Partners. Until then, "It's a 'hold your breath' type of market," he added.

The Dow Jones Industrial Average ended the trading session down 1.6 points, or less than 0.1%, to 27782 after the blue-chip index bobbed around the flat line earlier in the session. The S&P 500 rose less than 0.1%, while the Nasdaq Composite declined less than 0.1%.

Earlier, Cisco's move acted as a significant drag on the price-weighted Dow industrials, accounting for about a third of the index's decline. It also fell more than any other stock in the S&P 500.

"We're painfully aware of the situation" with Cisco, Mr. Bailey said. Despite Cisco's bellwether status, the company's problems appear to be restricted to itself, he added.

Technology stocks in the S&P 500 fell 0.6%, as shares of several other communications equipment companies declined along with some semiconductor stocks.

Health-care stocks also fell, adding to the pressure on major indexes. Several biotechnology stocks led the declines, including Biogen, which fell 3%.

Falling shares of Kraft Heinz also factored into Thursday's downbeat session. The food company slid nearly 6% after Goldman Sachs cut its outlook on the stock.

Elsewhere, the Stoxx Europe 600 fell 0.2%, led by declines in auto makers.

Asian stocks, meanwhile, were mixed, with the Shanghai Composite up 0.2%, while Hong Kong's Hang Seng waned 0.9% as antigovernment protests snarled the city. Clashes between police and protesters have intensified in recent days.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
CHINA-SHANGHAI COMP -0.30% 2915.7 End-of-day quote.16.73%
DJ INDUSTRIAL 0.79% 28132.05 Delayed Quote.19.65%
HANG SENG 1.33% 26983.18 Real-time Quote.3.03%
NASDAQ 100 0.77% 8466.894095 Delayed Quote.31.98%
NASDAQ COMP. 0.73% 8717.317521 Delayed Quote.29.94%
S&P 500 0.86% 3168.57 Delayed Quote.25.32%
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