Thursday brought another day of sharp declines for the stock market, as investors focused on the negatives from certain major earnings reports and economic data releases today. In particular, poor results from the nation's largest retailer raised questions about the strength of the consumer economy, and economists seem less certain about how strongly the U.S. economy will bounce back from a terrible winter quarter. Still, despite the gloomy mood on Wall Street, Cisco Systems (CSCO -0.37%), Plug Power (PLUG -3.11%), and Kindred Healthcare (KND) powered ahead today.
Source: Cisco Systems.
Cisco Systems rose 6% after posting quarterly results that weren't quite as negative as investors had feared. To be sure, Cisco still faces some major challenges, as sales fell by 5.5% from year-ago levels, and the networking giant had to work hard just to keep its earnings stable compared to last year's fiscal third quarter. But a 2.6% rise in service-related revenue showed the path that Cisco is trying to take toward longer-term stability. With Cisco having exceeded its own guidance, investors appear to share CEO John Chambers' optimism that customers will perceive the company as a one-stop shop for their information technology needs. Cisco will continue to face tough competition in core focus areas like the Internet of Things and other cloud initiatives, but shareholders are starting to believe that the worst might be over.
Source: Plug Power.
Plug Power climbed 5.5% after the fuel-cell specialist got an analyst upgrade. Yet, as has happened with increasing frequency in this volatile market, the upgrade came with a catch: the analyst also reduced the price target on the company, in part to reflect the plunge in Plug Power's share price over the past few months. Many investors remain skeptical about Plug Power's long-term ability to beat out other fuel-cell companies and rivals in other forms of alternative energy. But with a big capital-raising offering pulling in brand-new shareholders at $5.50 per share -- almost 40% above today's levels -- Plug Power still has massive support from the investing community that could help keep its share price rising in the future.
Kindred Healthcare jumped 11% as the provider of long-term care services announced a bid to buy Gentiva Health Services (NASDAQ: GTIV). The bid would pay Gentiva shareholders about $14 per share, representing a 64% premium to its closing price last night, and the deal would be 50% cash and 50% Kindred Healthcare shares. Gentiva Health Services rejected Kindred Healthcare's offer, and now the big question facing Kindred is whether to go through a proxy fight to try to take control of Gentiva on a hostile basis. What's interesting is that Kindred shares are also higher, reflecting the belief in the potential benefits from a combination despite the risks involved.
