U.S. Stocks Fall as Analysts Say Slowdown Hurting Cisco, Intel

Bloomberg reports: U.S. stocks declined after analysts said a slowing economy may hurt sales at Cisco Systems Inc. and Intel Corp., offsetting gains by materials producers as Alcoa Inc. beat profit estimates because of higher aluminum prices.

Cisco retreated to the lowest price since September 2006 after UBS AG said the biggest maker of computer-networking equipment faces a slowdown in the U.S. and Europe. Intel slipped to a four-month low on Merrill Lynch & Co.'s prediction that the largest computer-chip maker may fail to beat estimates in the second half. Alcoa sent the Standard & Poor's 500 Materials Index higher by the most in three weeks, and steelmakers surged the most since October 2002.

The S&P 500 lost 0.7 point, or 0.1 percent, to 1,273 at 12:18 p.m. in New York. The Dow Jones Industrial Average fell 10.67, or 0.1 percent, to 11,343.54. The Nasdaq Composite Index slipped 9.91, or 0.4 percent, to 2,284.53. About 18 stocks declined for every 17 that rose on the New York Stock Exchange.

``Cisco has always been a company that the investment community has looked to for guidance as to what spending trends are looking like,'' said Liam Dalton, chief executive officer of Axiom Capital Management, which oversees $1.3 billion in New York. ``If technology is going to be weak, it is certainly going to reign in potential further gains for the market.''

Profit at S&P 500 companies declined 11 percent on average in the second quarter, according to the average estimate of analysts surveyed by Bloomberg. Income is projected to slump 60 percent on average at financial companies. Global stock markets have erased more than $11 trillion this year as record oil prices and more than $400 billion in credit-related losses threatened to push the U.S., the world's largest economy, into recession.

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