While you were sleeping: Cisco lifts Wall Street, euro up

While you were sleeping: Cisco lifts Wall Street, euro up

(BusinessDesk) April 7 - Equities on Wall Street rose, underpinned by gains in Cisco Systems Inc on anticipation the company would revamp its operations.

The market received a boost from Cisco, which jumped more than 5% after chief executive John Chambers yesterday suggested the networking equipment maker might change operations to narrow its focus.

Cisco might sell or spin off its consumer business, Morgan Stanley said in a note.

In early afternoon trading on Wall Street, the Dow Jones Industrial Average advanced 0.24%, the Standard & Poor’s 500 Index rose 0.16% and the Nasdaq Composite Index climbed 0.31%.

Other tech stocks advanced too. Broadcom Corp gained more than 3% after Oppenheimer raised its rating on the chipmaker's stock.

Even so, investors were reluctant to commit fresh funds before the start of the U.S. earnings season next week.

The market is "basically poised and waiting to see if these [earnings] numbers will support the upside," Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco, told Reuters. "It's a consolidation week."

In Europe, the Stoxx 600 ended the day 0.2% higher after earlier falling as much as 0.4%.

The European Central Bank will raise interest rates on Thursday for the first time in almost three years as policy makers try to keep inflation under wraps, according to all 57 economists polled by Bloomberg.

A report today showed that German factory orders in February climbed at almost five times the pace that economists had predicted.

Expectations for rising interest rates helped the euro climb to the highest level in 14 months against the greenback, rising 0.8% to US$1.4329 in early afternoon trading in New York,

Meanwhile, Portugal's caretaker government said on Wednesday that it needed financing from the European Union. The comments mark a change from the country’s resistance to asking for aid so far despite a rapidly deteriorating financial situation.

Since the nation’s government resigned last month, bond yields have soared as Portugal’s credit rating was slashed.

"In this difficult situation, which could have been avoided, I understand that it is necessary to resort to the financing mechanisms available within the European framework," said Portugal's Finance Minister Fernando Teixeira dos Santos.

It was not immediately clear from the finance minister's comment whether he was referring to a short-term loan to secure financing until a June 5 snap general election or a fully-fledged bailout like those received by Greece and Ireland, according to Reuters.

Brent crude was 46 cents weaker at US$121.76 a barrel by 1848 GMT, while U.S. crude oil futures were steady at US$108.35 a barrel.

A Reuters poll of traders, bank analysts and hedge fund managers showed a majority expected a decline below US$120 a barrel by the end of the quarter. Even so, many also said tensions in the Middle East could push prices to US$130 or even US$150 a barrel in the second half of the year.

The Paris-based International Energy Agency said the current level of oil prices could derail an economic recovery.

"Oil at US$120 or more has an effect on economic activity. We have seen similar levels during times of economic slowdown if not recession," its deputy director, Richard Jones, told Reuters in Dubai.

Meanwhile, spot gold hit a record US$1,461.91 an ounce. It was last up 0.3% to US $1,455.34 an ounce.

And strong investment demand boosted silver more than 1% to US$39.75, its highest level since January 1980.

(BusinessDesk)

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