* Cisco shares slide 15 pct after dismal outlook
* Indexes off: S&P 0.8 pct, Dow 0.8 pct, Nasdaq 1.3 pct
* For up-to-the-minute market news see []
(Updates to midmorning)
By Edward Krudy
NEW YORK, Nov 11 (Reuters) - U.S. stocks slid on Thursday
after a gloomy outlook from Cisco Systems Inc underscored the
risks that a still-weak economy posed to corporate profits and
sparked a technology-led selloff in an overbought market.
Cisco's <CSCO.O> shares fell 15 percent and hit other
stocks in the sector after Cisco Chief Executive John Chambers
cautioned over "short-term challenges" in Europe and
public-sector spending. For details, see []
"More than anything else, it was the guidance," said Peter
Kenny, managing director at Knight Equity Markets in Jersey
City, New Jersey. "Very often, Chambers comes out with very
forward-looking and oftentimes prophetic guidance for the
group."
The Dow Jones industrial average <> dropped 93.05
points, or 0.82 percent, to 11,263.99. The Standard & Poor's
500 Index <.SPX> lost 9.43 points, or 0.77 percent, to
1,209.28. The Nasdaq Composite Index <> fell 34.39 points,
or 1.33 percent, to 2,544.39.
Technology shares were lower after the outlook from Cisco,
the world's top manufacturer of network routers and switches.
Chipmaker Altera Corp <ALTR.O> fell 3.6 percent to $32.64,
while Juniper Networks Inc <JNPR.N>, another router maker,
dropped 1.7 percent to $33.96. Cisco itself fell $3.66 to
$20.83. The S&P technology index <.GSPT> fell 2.2 percent.
Cisco has lost $21 billion in market value so far this
session, according to Howard Silverblatt, an analyst at
Standard & Poor's. Silverblatt said the drop is set to be the
biggest dollar loss ever for the stock.
If Cisco ends the day with this percentage loss, it would
be the worst one-day percentage fall since July 14, 1994, when
Cisco fell 17.71 percent, according to Thomson Reuters
Datastream.
"This is the second quarter in a row where its outlook
disappointed," said Mark Bronzo, a money manager at Security
Global Investors in Irvington, New York, which manages $22
billion. "The market doesn't have a lot of patience for names
like this."
"It will be interesting to see if the market perceives this
as a Cisco-only event, or something for tech in general," he
added.
Volume in Cisco's shares jumped massively in early trading.
In the first half hour, nearly 200 million shares changed
hands, almost four times the 50-day moving average for a whole
day's volume, which stands at around 50 million.
The gap down took Cisco shares well below its 200-day
moving average as the stock fell to its lowest level in over
two months on an intraday basis. The decline erased much of the
stock's run-up as part of wider market rally that started in
September.
The market has stalled this week after the rally that has
pushed up the S&P 500 more than 16 percent in the last two
months. Equities have been volatile in the absence of catalysts
to drive prices, often taking their cue from the currency
market.
The market was extended going into Thursday's session, with
the S&P 500's relative strength index pointing to a heavily
overbought condition. Cisco was the catalyst needed to prompt
investors to book recent gains.
(Reporting by Edward Krudy; additional reporting by Caroline
Valetkevitch and Ryan Vlastelica; editing by Jeffrey Benkoe)
