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Cisco To Save Rally On Thursday?

In extended trade shares of Cisco popped as much as 4% after the company’s beat Street expectations, which investors took to mean businesses are beginning to invest in network equipment after cutting back on spending for the past year.

Cisco said that for the quarter ended October 24 net profit was $1.8 billion, or 30 cents a share, compared with $2.2 billion, or 37 cents a share, a year earlier.

It also said the board of directors authorized up to $10 billion in additional share repurchases.

Cisco is the world's top vendor of routers, switches and other network equipment used by global businesses, including phone companies as well as governments.

Many of those customers had put off large investment decisions during the recession, but analysts have said some were beginning to shift gears toward more spending to cope with growing Internet traffic.

Strategy Session with the Fast Money traders

This is the news tech investors were craving: big time beats from Cisco Systems on the top and bottom lines, gross margins, and some very optimistic commentary from CEO John Chambers, explains CNBC’s Jim Goldman.

In fact, Chambers is almost ridiculously optimistic. "Building off what we saw as a clear tipping point in Q4, our Q1 results continued to reflect strong sequential growth trends that meet or exceed expectations during normal economic times." He goes on to reference an "improving economic outlook," and then cites an "unparalleled opportunity to drive more value into the core of the network," Goldman says.

In other words, better times lay ahead, muses Goldman. (Click here to read Goldman’s blog Tech Check)

What’s the trade?

I think the stock has room to run, says Guy Adami. At 15 times forward earnings it looks cheap to me. With that said I wouldn’t go chasing it. And don’t go running into rival Juniper on this news, he adds. That’s not apples to apples.

Cisco beat on the revenue line and provided strong insights into corporate spending, adds Tim Seymour. That makes me bullish going into Thursday’s open.

I’m bullish Cisco as well as most other tech names, says Joe Terranova. I expect to see pent up demand come into the sector in a broad way.

> For complete Cisco earnings coverage click here

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AFTER HOURS ACTION: WHOLE FOODS

Shares of Whole Foods dropped as much as 9% in extended trade after the upscale grocer posted higher profits but issued a 2010 outlook that was below analysts' views.

Net income was $28.7 million, or 20 cents per share, for the fiscal fourth quarter ended Sept 27. That compared with net income of $1.5 million, or 1 cents per share, in the year-earlier quarter.

However, Whole Foods forecast same-store sales growth of 1% to 4% while analysts were projecting a sales increase of 6% to $8.54 billion, according to Thomson Reuters.

What’s the trade?

The pullback might be an opportunity, says Pete Najarian.

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DOW GIVES UP MOST OF 156 PT. GAIN

Despite closing in positive territory, the Dow gave back a big slice of the Thursday's advance after the Federal Reserve reiterated its intent to keep rates low, but gave investors few new reasons to boost holdings.

Stocks had pushed higher in the hour following the FOMC statement, after the Fed kept its benchmark federal funds rate unchanged in a range of zero to 0.25 percent.

But the market was unable to hold those gains as it succumbed to selling pressure in the last half-hour of trading and the Nasdaq ended slightly lower.

The Fed's closely watched policy statement was somewhat more upbeat than its statement in September. However, it was also more explicit about why it expects to keep rates low, citing "low rates of resource utilization, subdued inflation trends, and stable inflation expectations."

What’s the trade?

As far as I’m concerned the Fed statements keeps the weak dollar / strong commodities rally alive, muses Tim Seymour.

But don’t forget the market momentum is lower, overall. I wouldn’t anticipate any broadly aggressive buying ahead of the employment numbers. And once we get past Friday’s employment number I’m not sure what the catalyst will be to take us higher.

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GOLD HITS RECORD AFTER STATEMENT

Gold hit a record high for a second straight day on Wednesday, moving within striking distance of $1,100 an ounce as the dollar dropped broadly after the Federal Reserve said it intended to keep interest rates low for some time.

The dollar weakness against the euro and a basket of major currencies added to momentum first triggered by India's purchase of 200 tons of gold from the International Monetary Fund.

What’s the trade?

Gold has momentum right now, muses Joe Terranova. But once the broad market gets past Friday’s employment number I’m not sure what the catalyst will be for any of it.

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BEARISH REVERSAL: FINANCIALS

Banks ended the day as the market’s worst sector with Goldman sliding toward $170 after the Fed kept its benchmark federal funds rate unchanged in a range of zero to 0.25 percent.

What’s the bank trade?

I still think Wells Fargo trades down to $25, muses Guy Adami.

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DID EASY MONEY TRADE END TODAY?

For the first time in a while, the dollar and stocks moved in tandem, with the S&P paring gains as the greenback fell. Lately a weaker dollar has triggered rallies with energy and commodities leading the way – but not this time.

Did the weak dollar / strong stock market correlation end today? For insights we turned to Jim Iurio of TJM. Find out how he suggests trading this tape. Watch the video.



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Trader disclosure: On November 4th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (CSCO), Is Short (CSCO) Calls; Najarian Owns (GE) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (UUP) Calls; Najarian Owns (YHOO), (YHOO) Puts; Najarian Owns (TXN); Terranova Owns (GS), (RIMM), (CAM), (MA), (OIH); Terranova Owns December Gold Futures; Seygem Asset Management Owns (BSBR)

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