The Dow Jones Industrial Average (DJINDICES: ^DJI ) had shed more than 183 points as of 11:30 a.m. EDT. Cisco (NASDAQ: CSCO ) was the index's best-performing stock, while tech stocks Zendesk (NYSE: ZEN ) and Tower Semiconductor (NASDAQ: TSEM ) also posted solid rallies.
Inflation comes in higher than expected
Data from the U.S. Bureau of Labor Statistics showed that prices in the economy were rising faster than economists had anticipated. The Consumer Price Index, or CPI, rose 0.3% in April on a month-over-month basis, in line with the 0.3% estimate. However, core CPI, a measure that excludes the cost of variable items such as food and fuel, rose 0.2% on a month-over-month basis, double the 0.1% estimate.
Runaway inflation is dangerous, but rising prices are also a sign of economic activity. Nevertheless, the inflation data didn't appear to have much affect on the Dow Jones on Thursday.
Cisco surges after earnings
Shares of Cisco rallied more than 7% after the company reported strong earnings. Earnings per share of $0.51 exceeded analysts' estimate of $0.48, while revenue also came in slightly above expectations.
During the earnings conference call, Cisco's management spoke at length about the opportunities presented by software-defined networking, and vowed to dominate the market in the coming years.
Zendesk rises on trading debut
Zendesk shares posted a monstrous 40% gain, to $12.65, in late-morning trading. Thursday was Zendesk's trading debut, and investors appeared eager to buy shares in the company. While some recent tech IPOs have struggled on their trading debuts, others have experienced notable swings to the upisde -- Zendesk is clearly falling into that later category. In total, Zendesk's IPO brought in about $100 million to the company, as shares were originally priced at $9.
Zendesk is a cloud-based software solution provider. It offers products that allow businesses to handle customer inquiries and facilitate better customer service. Zendesk, for example, might power the technology used to chat with a customer service represented on a given company's website.
Tower Semiconductor rallies on earnings
Tower Semiconductor shares were up more than 4% after a solid earnings report. In the first quarter, Tower earned $39 million -- a year earlier, it lost $23 million.
But it may have been the company's guidance that so strongly sent shares to the upside. Next quarter, Tower expects to generate about $230 million in revenue, more than analysts had expected.
Tower also spoke about its new joint venture with Japanese electronics giant Panasonic. Tower anticipates that the joint venture will soon generate up to $90 million-105 million in revenue on a quarterly basis.
R.I.P. Internet -- 1969-2014
At only 45 years old... the Internet will be laid to rest in 2014. And Silicon Valley is thrilled. Because they know... The Economist believes the death of the Internet "will be transformative." In fact, the CEO of Cisco Systems -- one of the largest tech companies on the planet -- says somebody's going to bank "14.4 trillion in profit from one concept alone."