Mubarak speech sparks late gain; Dow hit by Cisco
NEW YORK (Reuters) - The S&P and Nasdaq eked out gains in the final minutes of trading on Thursday as Egyptian President Hosni Mubarak said he would delegate powers to the vice president, though he stopped short of resigning.
The Dow ended slightly lower, breaking an eight-day rally after network equipment maker Cisco Systems Inc (CSCO.O) gave a weak outlook.
The S&P and Nasdaq wavered in volatile late-day action as Mubarak began a speech in response to the weeks of civilian protests. Earlier in the day, as media reports spread that Mubarak might resign, equities rebounded off early lows sparked by the disappointment over Cisco.
"The moment Mubarak said he would be giving up duties to his vice president, the market said it was a good thing and rose," said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co in New York.
"There was an initial reaction that things would be better, but that doesn't seem to be the case," Holland added. Mubarak's speech enraged protesters, who reacted with chants of "Down, down Hosni Mubarak."
More than two weeks of civilian unrest in Egypt have created some uneasiness among global investors on fears that political instability could spread through the region and impact commodities.
The Van Eck Market Vectors exchange-traded fund (EGPT.P) ended up 0.45 percent, cutting gains late when it appeared that Mubarak was not stepping down. Previously, the fund had risen as much as 5.8 percent.
Volume on Wall Street was stronger than in recent days, which had seen some of the thinnest trade of the year. But with a total of about 8.15 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, volume was still below last year's daily average of 8.47 billion.
"Egypt stopped us from dropping lower, but the low volume means that people are skeptical of the climb we've had," said Michael Nasto, senior trader at U.S. Global Investors Inc in San Antonio, Texas. The Dow and S&P are both up more than 5 percent since the start of 2011.
Cisco shares tumbled 14 percent to $18.92 on heavy volume a day after the outlook, but chief competitors surged as investors see Cisco losing market share. Juniper Networks (JNPR.N) rose 7.6 percent to $43.40 and the Networking Index .NWX surged 3.5 percent.
The Dow Jones industrial average .DJI was down 10.60 points, or 0.09 percent, at 12,229.29. The Standard & Poor's 500 Index .SPX was up 0.99 points, or 0.07 percent, at 1,321.87. The Nasdaq Composite Index .IXIC was up 1.38 points, or 0.05 percent, at 2,790.45.
Also weighing on the Dow was Wal-Mart Stores Inc (WMT.N), which fell 2 percent to $55.59 after UBS downgraded the stock to "neutral" from "buy." UBS said a sales recovery at the retail giant could take longer than expected.
New U.S. claims for unemployment benefits dropped to their lowest level in 2-1/2 years, the government said on Thursday, in a sign the labor market was improving.
Kraft Foods Inc KFT.N fell in extended trading after it reported fourth-quarter results. The stock, a Dow component, was off 1.3 percent to $30.72.
Disappointing earnings overseas hurt sentiment as Credit Suisse (CSGN.VX)(CS.N) missed profit expectations. The bank's U.S.-traded shares dropped 7.2 percent to $43.27 while peer Deutsche Bank (DB.N) fell 2.6 percent to $62.61 on the New York Stock Exchange.
Soft drink and snacks maker PepsiCo Inc (PEP.N) cut its full-year earnings growth target, sending shares down 1.6 percent to $63.36.
The number of advancing stocks slightly outnumbered the number of declining issues on both the New York Stock Exchange and Nasdaq.
(Editing by Leslie Adler)