The Dow Jones
Panic in the IT Sector
Instead, the larger news today is Cisco's
Take a breath
However, in the midst of investors selling off IT stocks, I have to give one piece of caution: We've seen this before. Go back and look at Cisco's chart over the past two years. Starting in early 2010 you'll see a series of peaks and cliffs. The peaks are optimism heading into Cisco's report; the cliffs are the disappointment after Cisco lets investors down. The cause of Cisco's poor performances and weak outlook across a series of disappointing reports is rarely the company itself, but is frequently the result of a nefarious economy hell-bent on ruining Cisco's "solid execution." Yet, since the beginning of 2010 Cisco is down nearly 29% while Oracle is up 9%, Riverbed up 48% even after a recent steep fall, and F5 is up an amazing 136%. Cisco's main saving grace is that peer Juniper is down a similar amount, about 32%.
The point? There are definitely some signs of enterprise spending slowing down this year. EMC projected global IT spending will be roughly halved in 2012 relative to 2011. However, we've seen this same game from Cisco before. The company has routinely cried foul on the global economy only to see its competitors and other large IT firms go out and keep doing the real executing. If you're selling technology today based on Cisco's weak report, I'd reconsider.
Keep searching for global opportunities
That's it for today's market checkup. If you're left scratching your head at how companies like Apple keep blowing away expectations while Europe and the U.S. struggle, look no further than the following statistic that sums up their opportunity the best: In the past decade, emerging-market consumer spending grew 250%, leaving the growth rates of the U.S. and Europe in the dust. Not surprisingly, Apple's China sales are what pushed them over the top in their incredible last quarter. If you're an investor scanning the world for opportunities, look no further than our new report: "3 American Companies Set to Dominate the World." In it, Fool analysts select three companies with international growth opportunities that are simply stunning. The report is free, but won't be available forever, so get your copy by clicking here today!