Cisco Saves Nasdaq
Brown Bag Lunch
August 26, 1999
by Tish Williams
Cisco made headlines and kept techs afloat as the Nasdaq held onto a 4.47 grip in positive territory at 2,810.07. The Dow focused on bad GDP numbers and slid 50.03 points to 11,276.01.
Big Picture: Dow watchers may feel comfortable with interest rates, but Thursday morning Commerce Department data is sure to be unsettling. The gross domestic product (GDP) grew only 1.8 percent in Q2 99. A month ago, the Commerce Department anticipated the number would come in at 2.3 percent. A trade deficit of $14.4 billion for the quarter was blamed for the shortfall.
NYSE stocks suffered as three decliners stood up to be counted for every two advancers. Nasdaq winners and losers were nearly tied in morning trading amid big tech news.
Again!: Cisco (CSCO: +1 3/16, 69 13/16) can't stop bingeing. It sees a succulent optical cross-connect company, and it just can't help itself. An optical switching company? Oh maybe just a bite. How about a $6.9 billion acquisition of Petaluma, Calif.-based Cerent, Cisco's biggest acquisition since it bought StrataCom in the $4 billions? If you insist. Cerent brings a SONET box capable of handling OC3 through OC192 (read: from smaller to pretty stinkin' fast telephone networks) and all types of communications--from voice, video, high-speed and slower networks. For dessert, Cisco picked up Monterey Networks for $500 million. Delish!
Tellabs (TLAB: -3 15/16, 63 13/16) took a direct hit on the deal, while Lucent (LU: -3/8, 67 7/8) had to feel a big chunk of its telecom system supremacy slipping into the Cisco abyss. Poor Ciena (CIEN: +2 1/8, 36 7/16) remembered what could have been and Nortel (NT: -11/16, 45 5/16) kicked the dirt, realizing its $500 million buys wouldn't cut it.
Big Boys: Dell (DELL: -1/2, 48 1/2) wraps up its big conference Thursday, with John Chambers sticking to his special appearance, the audience ruminating over Dell's customer services offering Wednesday and the unveiling of an hourglass-shaped PC. Funny shapes? That's not a corporate PC. Is Dell moving into the consumer realm? Pretty sneaky...
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