Why Cisco's Higher While the Dow Is Flat


Yesterday's pronouncement from the Federal Reserve that it intends to keep pressing on with its attempts to stimulate the economy met with disappointment from investors, who had bid stocks upward in the hopes that economic growth would continue to accelerate. Yet given the speculation over whether the small decline in GDP was a sign of impending recession or merely an anomaly, investors are waiting for tomorrow's employment report to confirm either the bull or the bear case. That means today is a waiting game for investors, and the stock market's moves bear that out, with the Dow Jones Industrials managing just a four-point gain by 10:50 a.m. EST. The S&P 500 meanwhile, is down about half a percent.

Within the Dow, Cisco Systems rose 1.25%. Yesterday the company got a favorable upgrade from an analyst, who highlighted Cisco's success in integrating its product offerings into a one-stop solution for many business customers. Given the importance of that business model for tech players throughout the industry, Cisco's positive experience bodes well for the stock despite its long-stagnant performance.

Cisco's gains may also partly owe to favorable results from JDS Uniphase , which rose nearly 17% after beating earnings expectations and getting an analyst upgrade of its own. Success in telecommunications networking equipment should bolster Cisco's prospects substantially, and if JDS Uniphase's experience isn't unique to the company, then Cisco could benefit even further from general improvement in the industry.

Finally, dividend giant Pitney Bowes soared 14% after announcing that it anticipates faster-than-expected growth in its business enterprise segment. As the company known for its postage-metering machines has been forced to reinvent itself, signs of broader business-diversification are extremely encouraging. Moreover, the company maintained its lucrative dividend, which still equates to a yield of nearly 11% even after the huge jump.

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The article Why Cisco's Higher While the Dow Is Flat originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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