U.S. stocks are falling across the board on Thursday amid continued political turmoil and weak earnings results, and a quick glance at the major indexes reveals that the tech-heavy Nasdaq Composite COMPX is poised to be today’s biggest loser.
Tech stocks are being dragged down thanks—at least partially—to the disappointing earnings results from industry giant Cisco (CSCO – Free Report) . On Wednesday afternoon, Cisco posted adjusted quarterly earnings of 55 cents per share, which matched the Zacks Consensus Estimate but fell about 3% from the year-ago period.
Total revenues of $12.13 billion were also in line with our consensus estimates, but these results marked a 4% year-over-year decline. What’s worse, the company warned that first-quarter 2018 revenues are expected to drop between 1% and 3%, meaning that the headache isn’t quite over for the technology equipment maker.
Shares of Cisco were down more than 4% through morning trading hours. With a market cap of about $160 billion, Cisco is the ninth-heaviest weighted stock in the Nasdaq Composite Index, which witnessed significant slumps from several other tech behemoths on Thursday morning.
Apple (AAPL – Free Report) , the top component of the index, dipped just over 1.2%, while the index’s second-heaviest component, Microsoft (MSFT – Free Report) , fell nearly 1%. Shares of Amazon (AMZN – Free Report) matched Apple’s slump, while social media leader Facebook (FB – Free Report) also dropped about 1%.
The tech sell-off comes just one day after President Donald Trump announced that his American Manufacturing Council and Strategy & Policy Forum were disbanding in the wake of his controversial comments on last weekend’s tragic events in Charlottesville.
After being criticized for an initial response that implied “many sides” were to blame for the violence at Saturday’s white nationalist rally, Trump doubled down on his argument during an impromptu press conference on Tuesday, causing several notable CEOs to resign from his councils in protest.
For the “businessman president,” a breakdown of two key advisory councils made up of the country’s top executives is certainly not a great look, and now serious doubts have been cast on Trump’s ability to set forth the policy initiatives that his administration—and the GOP-controlled Congress—have been touting.
This could mean even more volatility in the stock market as investors start to lose confidence in the corporate tax reform and infrastructure investment plans that were supposed to spark 3 – 4% growth in the economy.
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