Broadcom, Cisco and other technology companies send stocks higher
NEW YORK — Technology companies led stocks higher Wednesday after an analyst upgraded wireless communications chip maker Broadcom and the CEO of Cisco promised to take “bold steps” to narrow the company’s focus.
Broadcom Corp. rose 4.3 percent, the most of any stock in the Standard & Poor’s 500 index, after an Oppenheimer analyst said the company should benefit from continued growth of mobile and wireless phones.
Cisco Systems Inc. rose 3.3 percent. CEO John Chambers said in a memo to employees that recent missteps were “unacceptable.” Cisco has had three quarters of poor earnings. Analysts say the company is overly reliant on revenues from state and local governments. Chambers promised that major changes were coming, although he offered few specifics.
Other technology companies including Microsoft Corp. and Apple Inc., rose about 1 percent.
The Dow Jones industrial average rose 38, or 0.3 percent, to 12,365.
The Standard & Poor’s 500 index rose 3, or 0.2 percent, to 1,336. The Nasdaq composite index rose 13, or 0.5 percent, to 2,805.
Bond prices fell, pushing yields higher. The yield on the 10-year Treasury note rose to 3.52 percent from 3.49 percent late Tuesday.
Abercrombie & Fitch Co. rose 2 percent after several analysts raised their price targets on the company, citing the retailer’s strong 2012 earnings outlook and international prospects.
Netflix Inc. rose 1 percent after the online movie rental company said it would start streaming the hit TV series “Mad Men” as part of a multi-year deal with Lions Gate, the show’s producer.
Monsanto Co. fell 3 percent after the company issued an earnings forecast for the year that was below analysts’ expectations.
Traders want to see how higher prices for oil, gas and other raw materials are affecting corporate profits. They’ll get their first glimpse next Monday, when Alcoa Inc. reports its first-quarter earnings, providing the unofficial start of earnings season.
Robert Russell, president of Russell & Co., a wealth advisory firm, said he expects higher commodity prices to hurt profits.
“The U.S. markets are running on fumes at this point,” he said. “There’s going to be more of a strain on corporate earnings.”