Cisco doesn't inspire a tech stock rally

But it makes sense that no other stock follows it higher.

By Jim Cramer Nov 14, 2012 10:05AM

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Jock Fistick Bloomberg via Getty ImagesCan Cisco (CSCO) matter? Can Cisco play any more role of taking us higher than Home Depot (HD) did? Or Kors (KORS)? Or Dick's (DKS)? Can it lift the market after days of morass and quagmire even as those high-profile retail plays with good numbers couldn't?


Welcome to the world of pin inaction. As Cisco traded up Tuesday night I kept checking out all the usual tech subjects to see who was moving up in a correlative fashion. It was rather amazing. The only stock I saw people taking was Broadcom (BRCM), and that's because, somehow, even as Broadcom's main business, some 50%, is smartphone, people view it as a cable box company and Cisco makes cable boxes. So Broadcom, which had been brought down when it should have traded up when its true analogue Qualcomm (QCOM) reported its terrific numbers, is now going to get its due. I suspect the shorts, who had been leaning on this one betting Cisco would have a subpar number, will now have to scramble and cover.


But there was no other pin action in tech that I could see. Microsoft (MSFT), which had been going down already looked to have another teeny downdraft off of some more personnel changes. Intel (INTC) had no lift. That stock's at a 52-week-low. It didn't impact Apple (AAPL) and even though Cisco reiterated its bullishness about the Internet, I didn't see any Google (GOOG) buying. Facebook's (FB) caught up in the secondary, although I am inclined to buy that stock here because it has the growth that everyone else seems to sorely lack. (Microsoft owns and publishes Top Stocks, an MSN Money site.)

I could argue that EMC (EMC) should go up as Cisco called them out as a good partner, but they didn't call them out as a partner who was killing it with them. The business that drove this quarter was largely telco, and that doesn't include EMC, although EMC storage from burgeoning big data did get mentioned positively.


But there was a takeaway that can be acted on. CEO John Chambers took aim at Hewlett-Packard (HPQ), Huawei and Juniper (JNPR) and pretty much said that he had crushed them this quarter. He mentioned that 18 months ago everyone thought they these three were "eating (Cisco's) lunch." Now he said they are all losing share to his company. "We're beating them all."


To me, that means that you have to sell Juniper ahead of its quarter and you can continue to short Hewlett-Packard as that company is getting killed in personal computers, in printers and in consulting (IBM, (IBM) Accenture (ACN) and SAP (SAP)) and truly has no leg to stand on or, at this point, raison d'etre.


While Cisco clearly had a good quarter, certainly better than what I was expecting, what has made the stock reaction so strong is the comments made by five firms, JP Morgan, Opco, Wells Fargo, Wedbush and Jefferies, all of which said negative things about the environment and the guidance they expected Cisco to give. Frankly, I figured all five couldn't have been wrong. But they were. Totally and completely wrong and in a way they, not Cisco, will provide the biggest lift to the stock today.


So, it makes sense that no other stock follows it. Cisco did well despite the economic backdrop and because other companies in its industry faltered. The way to play the strength in Cisco? I would say Cisco, but this stock gets all its moves in a very limited period of time and to me, it just made this quarter's move already.


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Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long AAPL and EMC.  



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Nov 14, 2012 5:04PM


"A modest tax increase on the wealthy is not going to break their backs.  They'll still be wealthy."


The President actually said that.

Nov 14, 2012 4:45PM


The markets are not taking kindly to the President's comments regarding tax cuts.  Here we go.



Nov 14, 2012 3:51PM

I`m buying stocks big time.With so many people being beari**** time to man up and buy.In

early 2000 everybody was bullish and we know what happened then.I see screaming buys!!!

Nov 14, 2012 1:47PM


Hard to place buy orders now.  Big layoffs hitting the defense industries and layoffs popping up elsewhere.  Just like 2009.  Best to hold off until the end of January.



Nov 14, 2012 1:47PM
Jim... pays to take a step back and LOOK at the market from a bigger picture. If you're still in when the shift begins, you get to keep your heap and then we send you the bill for undermining the globe through financial manipulation. Could you please wake up... maybe call Bill the Contrarian and put some commonsense together?

A great example: Lowe's is up because a hurricane devastated the East Coast. When media tells that thousands of cars were destroyed too- the **** class jumps into auto makers but there are zillions of Toyota Priuses already on their way WHILE a major recall is occurring. See... this is financial stupidity. Name ONE publicly traded enterprise rebuilding a factory to make the stuff they shipped overseas so they could import it and cut off American workers? You won't find one. In fact you won't find anyone being proactive to avert getting their butts tossed out of the country. Financial strangulation is over. YOU will be poor before you know it, but... you knew that.

Nov 14, 2012 11:57AM
Abercrombie soars 30 % ! Who cares ? The market is in the TANK and going down ! DIE FRAUD STREET DIE AND TAKE ALL THE BIG TO FAIL WITH YOU !
Nov 14, 2012 11:40AM
Hey Jimmy how's that 164 point drop in Apple feel? Isn't that about 164/707 = 23% or bear territory.   Look at the bright side. Nokia released their Here mapping service and has submitted an app to Apple's Store to fix Apple's lousy maps. Maybe Apple will get their mojo back when the release the iPhone 6 and mini iPad 2 in the Fall of 2013. Good luck.
Nov 14, 2012 11:10AM
"WASHINGTON (AP) - President Barack Obama is lobbying business and labor groups to support $1.6 trillion in new revenue to avoid an impending fiscal cliff, telling the two sides he remains committed to requiring the wealthy to pay more in taxes..."

I'll re-iterate that the idea of higher taxes alone is not enough or will fix what ails us.

Administrators, lawyers, bankers, politicians and business inheritors all are well-off or rich but not by effort, more like by station.

Families, labor & small business are suppressed and impoverished. Flat out... those who take have taken too much and MUST give back. You say- one issue at a time but while Congress took six months off, America was impaled on what BIG has stuck us with-- debt and NO job recovery. It is only FICTION that people are lazy and cannot find work. It is TRUTH that a tier class separation is behind it and blockading has destroyed us.

WHY are there no bankers in JAIL? WHERE does the money come from that is used to puff the markets up in the morning and are recalled after 3pm? WHERE are the lenders that are critical to the credit and housing mess corrections? Bankers are not lenders. Harvard U cannot produce a person capable of fixing what bankers have abused. Are we to WAIT on 12/21/12 and be "surprised" or are YOU going to do more than 'propose'? We want SOLUTIONS. If Congress is stalemated by that Norquist Pledge, arrest those who signed it and send them to GITMO. We don't tolerate terrorism in America, even if it's in Congress.

Hard work isn't paying. Corruption is. If you want Americans to swing over to the dark side and fry up some grubbers and inheritors... so be it. If you would prefer more integrity... tell Boehner to DO IT NOW and tell McConnell to resign.

Beginning IMMEDIATELY, a list of lobbies who are in contact with elected Officials is to be put on major media websites with blog (not social network gimmick) access for comments. Time to tell members of Congress who are not sweating out progress, where they can go and how fast. I PAY TAXES on 70% LESS INCOME than I once had. No one has helped us in 4 years now. It isn't about 47%, its about deadbeats who take and have ruined. DO YOUR JOB, DESTROY WHAT DESTROYS AMERICA.
Nov 14, 2012 11:10AM
Jimmy keep writing books and reporting own what we  heard three days ago , and but your face on the wall of shame
Nov 14, 2012 11:04AM
Jon Chambers is the last person I would trust at any kind of performance reporting.  He could easily win the award for the most hype full when framing Cisco mid term performance.  That man is the grandfather of hyperbole and exaggeration.   He is very adept at painting  the best and most optimistic picture but is not in any way the most realistic or even reliable when analyzing and depicting CISCO performance.  I think the man likes to see himself as a market mover and shaker rather than just a CEO as he should. JMHO
Nov 14, 2012 11:01AM
Retail sales in October hit the toilet ! The American consumer out of money out of credit and with a mountain of debt ? Here comes the worst holiday season for retail business since the Great depression !  TAKE YOUR MONEY AND RUN !
Nov 14, 2012 10:57AM
And the manipulation in FB begins again.....MS and GS ....waiting to buy all the early shares and then slowly selling them back to  the market over the next few days it drift back to $20 by end of month.
Nov 14, 2012 10:55AM
Thank You Jim Cramer for yesterday's weather report.
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