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Futures gain after strong Cisco results

David Russell (david.russell@optionmonster.com)

Stocks are higher today after a strong earnings report from Cisco Systems and as the S&P 500 tries to hold its 200-day moving average.

Futures on the benchmark index rose by more than one-quarter of 1 percent. The Nasdaq 100 is also stronger, climbing almost half a percent on the back of CSCO's strong numbers.

The gains in the United States contrast with trading in Europe, where markets are lower amid persistently weak economic data. Asian bourses were mostly positive overnight.

The market remains at a crossroads between the danger of recession and the promise of accelerating growth in coming quarters. On one hand, investors have digested a string of negative headlines as sovereign-debt woes in Europe and budget concerns in Washington slow business. But other hand, they can look to strength in the U.S. housing and labor markets, plus the possibility of improving growth in China.

CSCO's report highlighted both those themes, with CEO John Chambers citing "signs of improvement in the U.S." The technology giant also beat expectations on the top and bottom lines, sending its shares higher by 8 percent in early trading.

Foreign-exchange markets are showing a modest trend toward risk appetite, with the euro bouncing at a support level from earlier in the year despite weak European stock trading. The Japanese yen is the biggest mover, falling across the board after Prime Minister Yoshihiko Noda said he would dissolve the country's parliament.

Commodities are mixed but modestly bullish, with oil and most agricultural foodstuffs marginally higher. Metals are down slightly. The big standout here is in natural gas, which is adding another 1 percent after a strong rally yesterday.

Aside from CSCO, retailer Abercrombie & Fitch is up 25 percent higher after beating expectations and issuing strong guidance. Staples rose 5 percent after its earnings exceeded estimates. Fertilizer stock Mosaic is down about 6 percent after cutting production guidance.

Today's biggest economic report will be the release of retail sales data at 8:30 a.m. ET. At 2 p.m. ET the Federal Reserve will release minutes from its last meeting, which could also sway sentiment.

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