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Dow component Cisco Systems dropped 1.7% after CFO Frank Calderoni reduced the company’s long-term revenue targets at its annual analyst conference. Cisco has aimed at annual revenue growth between 5 and 7% for the last few years, but is now looking at 3 to 6% over the next three years.
Facebook has been one of the few stocks to book strong gains today, rising more than 5% after Standard & Poor’s announced that the social media giant will replace Teradyne in the S&P 500 index after the end of trading on 20 December.
Today’s drop in the overall US stock market is partly a reflection of investors shifting their outlook for Fed tapering, with a steady build-up of strong economic data causing an increase in the number of analysts viewing a December taper as most likely. A survey of analysts conducted by Bloomberg in November showed that just 17% of respondents felt this way, while that proportion had grown to 34% last week.
As we come to the end of an incredible year for the stock market which has seen the S&P 500 gained 25% it is also possible that some of this week’s declines can be attributed to profit taking, with investors choosing to cash in their returns.
Tomorrow we have the producer price index for November from the US Bureau of Labor Statistics. A drop of 0.1% is expected.