CSCO’s 9% post-earnings drop erased $11 per share, accounting for nearly all of the Dow’s 75-point decline Thursday.
The Dow Jones Industrial Average fell 75 points to near 53,700 on Thursday, while the S&P 500 and Nasdaq reached fresh intraday highs. The divergence stemmed from Cisco’s 9% decline after its fiscal fourth-quarter results disappointed on margins, not revenue.
Cisco, trading near $124 before earnings, shed $11 per share. As a price-weighted index, the Dow converts share-price changes into index points at roughly six points per dollar. Cisco’s drop alone contributed about 65 of the 75-point decline, leaving the other 29 components largely unchanged.
The S&P 500 and Nasdaq, market-cap weighted, benefited from gains in tech stocks like Meta and Netflix, which are not Dow components. The Dow’s methodology amplifies the impact of high-priced stocks like Cisco.