U.S. stocks declined in early trade on Thursday despite better-than-expected jobs data with tech stocks particularly remaining weak as disappointing earnings from Cisco Systems weighed on the sentiment.
The S&P 500 Index declined 8.59 points, or 0.65 percent, to trade at 1,312.29 at 10:10 a.m. EDT. The Dow Jones Industrial Average fell 77.88 points, or 0.64 percent, to trade at 12,162.01. The Nasdaq Composite Index declined 0.80 percent.
Cisco Systems led the decline in the tech sector after reporting weaker-than-expected third quarter revenue guidance. Citi downgraded Cisco stock rating to “hold” from “buy” and lowered its target price to $22. The company shares plunged 12.66 percent.
The company expects third quarter net sales to grow 4 percent to 6 percent year-over-year, implying third quarter net sales of $10.78 billion to $10.99 billion, while Street predicts $11.85 billion. Cisco reported second quarter adjusted profit of $2.1 billion or 37 cents a share, down from $2.3 billion or 40 cents a share last year. Sales rose 6 percent to $10.41 billion. Analysts had expected profit of 35 cents a share on revenue of $10.24 billion.
Akamai Technologies Inc. (NASDAQ:AKAM) shares plunged 16.55 percent as it guided first quarter guidance below Street view. The company guided first quarter normalized earnings of 35 cents to 37 cents a share and revenue of $265 million to $275 million, while Street predicts profit of 38 cents a share on revenue of $283.68 million.
Applications for jobless benefits in the U.S. fell more than expected for the week ended Feb. 5, marking a drop for the second consecutive week. Initial jobless claims in the U.S. decreased by 36,000 to 383,000 compared with the revised figure of 419,000 in the previous week.
The euro declined1.01 percent to 1.3594 against the dollar and the yen declined 0.91 percent against the greenback.
Crude oil futures gained 0.17 percent to $86.86/barrel and gold futures fell 0.85 percent.
European stock markets are currently trading lower with FTSE100 down by 44.80 points, DAX30 down by 25.49 points and CAC 40 down by 27.90 points.