Upbeat Cisco boosts tech sector

Chambers: "comfortable" with analysts' predictions

Shares in Cisco Systems - the world's biggest make of computer networking equipment - jumped more than 20% after positive comments from chief executive John Chambers.

Mr Chambers said he was "comfortable" with analysts' estimates for Cisco's first-quarter results.

Cisco shares surged 21.52% to close up $2.47 at $13.95, sparking a long-awaited rally in US technology stocks.

The Nasdaq composite index soared 88.48 points, or 5.93%, to 1,580.81, after gaining nearly 7% at one point, to notch up its biggest gain since 18 April.

Orders 'on target'

Once the star of the high-tech sector - and briefly the world's most valuable company - Cisco has fallen dramatically to earth in recent month, seeing a 99% drop in net income.

In a poll of analysts, revenues for the three months to October were predicted to be $4.16bn, in a range of $4bn to $4.3bn.

Speaking at a conference in New York, Mr Chambers said: "I am very comfortable with the consensus estimates."

He said sales in August would range between flat and down 5% from the fourth quarter's $4.3bn.

Mr Chambers also said customer orders were on target in June, July, August and September.

He said there had been some disruption in orders after the 11 September attacks on the US but business has been good since then.

Analyst reaction

Jay Ruskind, equity strategist at Beck & Co, said: "Cisco's news helped the market move higher, as investors were looking for some good news to buy on."

"The market was oversold after some overall climactic selling after the market re-opened following the terrorist attacks and people have now discounted economic weakness in the third and fourth quarters are hoping the economy will pick up in 2002."

Mr Suskind said the "market wants to go higher from a fundamental and technical perspective".

Juniper Networks saw its shares rise nearly 26% to close up $2.47 at $12.0 following Cisco's lead.

Chip stocks also took a boost from the Cisco news, dealers said.