Cisco Earnings Reaction Keeps Stock Futures in the Red

Cisco and Walmart shares are headed in opposite directions after earnings

Managing Editor
May 17, 2018 at 9:18 AM
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Dow Jones Industrial Average (DJI) futures are signaling a negative start this morning, weighed down by Cisco Systems' (CSCO) lower-than-expected fiscal third-quarter revenue in its security business and lackluster forecast. The negative earnings reaction is overshadowing strong first-quarter e-commerce sales growth for Walmart (WMT) -- continuing an impressive round of retail earnings -- and is pressuring the tech sector. Elsewhere, the 10-year Treasury yield is continuing to hold near seven-year highs. Later today, a second round of trade talks with the U.S. and China will begin in Washington.  

Continue reading for more on today's market, including:

  • Nike's record high drew a fresh batch of options bulls.
  • 2 reasons this retail stock could rally tomorrow.
  • Blink stock has now scaled the Nasdaq twice in two weeks.
  • Plus, Coca-Cola stock upgraded; Kroger teams up with Ocado; and J C Penney slumps after disappointing sales.

Stock Futures Chart May 17

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 990,611 call contracts traded on Wednesday, compared to 499,498 put contracts. The single-session equity put/call ratio fell to 0.50, and the 21-day moving average remained at 0.62.
  2. The Coca-Cola Co (NYSE:KO) is up 0.9% in electronic trading, after Barclays upgraded the Dow stock to "overweight" from equal weight," while issuing a price-target hike to $48 from $45. The analyst in coverage waxed optimistic on the soda giant's business transformation. Coca-Cola stock fell to an annual low of $41.45 on Tuesday, and the $45 level -- currently home to its 200-day moving average -- has provided stiff resistance since early February. 
  3. Kroger Co (NYSE:KR) stock is up 3.1% ahead of the bell, after the company said it was partnering with online grocery retailer Ocado. Kroger will use the U.K.-based company's online delivery technology for orders in the U.S. Kroger stock has traded in a tight range lately, but the shares could test their 80-day moving average today for the first time since a post-earnings bear-gap in early March.    
  4. Unlike its sector peer Macy's (M), J C Penney Company Inc (NYSE:JCP) reported disappointing same-store sales in the first quarter, with the retailer citing slow traffic due to an extended period of winter weather. The company also cut its full-year adjusted profit forecast, sending JCP stock down 12% in electronic trading -- set for its lowest open since November.
  5. Today will bring the Philadelphia Fed business survey came in at a better-than-expected 34.4 in May while weekly jobless claims rose more than forecast. The Fed's balance sheet is also anticipated. Minneapolis Fed President Neel Kashkari is slated to speak mid-morning. Applied Materials (AMAT) will report earnings.

stock market news may 17

Trade Talks Spook Asian Stocks, Crude Boosts Europe

Asian stocks finished mostly lower, as traders continue to watch U.S. Treasury yields and a second round of U.S.-China trade talks. Japan's Nikkei was the only gainer, closing up 0.5%. Despite an impressive post-earnings boost from tech giant Tencent, Hong Kong’s Hang Seng fell 0.5%. Likewise, South Korea's Kospi and China's Shanghai Composite also shed 0.5%.

European markets are higher at midday, as crude hit a more than three-year high. Shares of U.K. grocery and delivery service Ocado also soared, after the company announced a new deal with Kroger that will bring its business to the U.S. London's FTSE 100 is up 0.2%, France's CAC 40 is 0.4% higher, and Germany's DAX has gained 0.3%, at last check.

 

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