The Dow Jones Industrial Average (DJINDICES: ^DJI) was down more than 70 points as of 11:15 a.m. EST, and index component Cisco (NASDAQ: CSCO) was selling off even more, with shares falling more than 2%. BlackBerry (NASDAQ: BBRY) shares were down a smaller amount, while Yahoo!'s (NASDAQ: YHOO) decline was roughly in-line with the broader market.
Government shutdown avoided
Congressional leaders have reached a bipartisan budget deal that may avert the threat of yet another government shutdown. Both chambers still must vote on the deal, but assuming it goes through that's one less factor weighing on the economy.
It's possible that Wednesday's market sell-off was, in part, due to the deal, as the Federal Reserve may be less likely to continue stimulating the economy. But with stocks hitting a record high on Monday, the sell-off may have just been some profit-taking.
Cisco gets hit with sell rating
Cisco shares were down more than the market in the wake of an initiation from analysts at Citigroup. The firm gave Cisco a sell rating with a price target of $18.
Cisco has disappointed investors in recent months; shares dropped following the last earnings report as the company warned next quarter would be challenging. Citi believes it will be even more challenging than Cisco expects, as the outlook for Cisco's switching and routing business remains uncertain.
Citi says BlackBerry breakup is best
Analysts at Citi didn't stop with Cisco, also slapping a sell rating on BlackBerry and cutting its price target to just $4. Previously, Citi had a neutral rating on BlackBerry shares.
Citi believes that the best-case scenario for BlackBerry shareholders would be to break up the company and sell its assets. However, Citi doesn't believe BlackBerry's management intends to do that -- indeed, earlier this month, BlackBerry's current CEO nixed the sale process and sent a letter to its enterprise customers stating that the smartphone maker is here to stay.
Yahoo! stumbles as Alibaba IPO delayed
Yahoo! pulled back more than 1% early on Wednesday in the wake of news that Chinese tech giant Alibaba planned to delay its IPO.
Yahoo! owns almost a quarter of Alibaba, and hopes for the IPO may have been behind much of the rally Yahoo! stock has enjoyed over the last year -- shares are up nearly 100% year to date, as Alibaba's estimated value has slowly ticked up. In February, analysts thought that Alibaba was worth about $66 billion; by October, its value had risen to more than $100 billion.
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