Stock Market Today: Cisco Systems and Wal-Mart Fall on Earnings Concerns

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The futures markets projected a roughly flat start for the Dow Jones Industrials as of 8:30 a.m. EST, with expectations that the Dow will rise about 11 points following yesterday's 71-point jump to an all-time record high. Investors will likely spend much of today listening to Federal Reserve chair nominee Janet Yellen testify before Congress, with her appearance before the Senate Banking Committee scheduled to start at 10 a.m. EST.

Investors will also be watching for potential earnings fallout for Cisco Systems and Wal-Mart , two of the last Dow components to report in the current quarterly earnings season.

Cisco CEO John Chambers. Source: Cisco Systems.

Cisco Systems shares are down 12.8% in premarket trading as of 9 a.m. EST after the tech giant reported results yesterday afternoon. As has been the trend among technology companies lately, Cisco did a good job of beating expectations for the quarter that ended in October, with earnings per share coming in $0.02 above projections. But the company's guidance for the January quarter and for the full 2014 fiscal year were a big departure from what investors had hoped to see, with current-quarter earnings projections more than 10% below predictions. Worst of all, Cisco expects a substantial drop in revenue for this quarter, defying expectations for a rebound. CEO John Chambers pointed to weakness in emerging markets for the particularly dour guidance.

Wal-Mart also fell in premarket trading before the bell, although its 1.6% decline was a bit less extreme than what Cisco experienced. Even though profits attributable to the retailer rose by 2.8% on a 1.7% increase in total revenue, Wal-Mart once again disappointed with a 0.2% drop in comparable-store sales from its overall U.S. business, with fuel only causing half of that decline. Despite coming up with what Wal-Mart called "our best holiday plan ever," the retailer said it expects flat same-store sales for the quarter ending in January as well, renewing concerns about the big-box chain's future growth potential.

Internationally, stocks rose in response to the strong performance from U.S. markets yesterday. European markets in Germany, France, and the U.K. were up between 0.5% and 1%, while the Japanese stock market posted a better than 2% advance. With so many investors relying on the Federal Reserve's continued ability to drive the bull market higher, you can expect potential volatility if Yellen's testimony turns up any surprises today.

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