Morning Dow Report: Cisco Pulls Down Dow Despite Budget Deal; Visa Gains

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.

Ordinarily, you'd expect the Dow Jones Industrials to rally when the U.S. government showed signs of working effectively. Yet even though lawmakers reached a budget deal to make sure the government can stay open past mid-January, investors didn't see the news as a positive. Instead, negative sentiment once again swirled around the uncertainties of future monetary policy, sending the Dow down 53 points as of 10:58 a.m. EST. Cisco Systems led the Dow downward, while Visa was the index's biggest gainer in early trading.

Cisco dropped almost 2% after a European court denied the networking giant's allegations that rival Microsoft's acquisition of Skype amounted to giving Microsoft a monopoly. Cisco said it wouldn't appeal the decision. Yet the case underlines the cutthroat nature of competition in the tech space, with Cisco trying unsuccessfully to defend its Internet-based communication business from Skype, which has gained popularity among users worldwide. Cisco also dropped on getting a sell rating from Citigroup, an unusual move for a Wall Street analyst.

But Visa gained 1.7%, likely in sympathy with rival MasterCard and its 4.4% jump. MasterCard announced that it would split its stock 10-for-1 and boost its dividend by 83%. Combined with a share repurchase program, MasterCard's moves make it clear that the growth potential in the card network industry remains intact. Yet as the leader in the space, Visa should arguably benefit even more from the favorable trends in the industry, especially if it can capitalize better on international growth and work on a mobile-payments solution that can fend off competitors.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Cisco Systems, MasterCard, and Visa. The Motley Fool owns shares of MasterCard, Microsoft, and Visa. 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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