To make matters worse, two dow components had less than stellar Earnings Reports, walmart cut its forecast for the remainder of the year. Take a look at walmart, the stock is down metropolitan 2, thats almost 3 as you can see, and then there is this stock, cisco. This stock suffering its biggest oneday drop in 15 months after the Network Equipment makers outlook disappointed investors. The Company Announcing theyre going to cut 4,000 jobs. Take a look agencies coe, one of the biggest drags on the dow. Cisco down more than 7 , 1. 87, 4. 531 24. 51 to the downside. We are going to be speaking with the ceo of cisco in just a few moments, so much to talk about with john today. A big down day in the market, the dow and the s p at the lowest level this more than a month. Nicole petallides, a business busy day back from vacation. It has been, indeed. You see the Dow Jones Industrials still down 207 points, and the selling is broad based. Most of the day weve had all 30 dow components with red air eaus. A couple of them are giving it a go such as caterpillar and alcoa, but for the most part, its all down air eaus arrows. Walmart had some news out, i know youll be talking with john chambers, thatll be a great interview, obviously announcing layoffs, 5 of the work force. Walmart giving an outlook thats weaker, higher payroll taxes, looking at the s p 500 adviser which is doing things differently, certainly the down arrows there. And on the nasdaq you have cisco on there again, but seagate, this is the technology realm. Weve seen gold jumping 32, everybody continues to talk about the fed and when they will begin to taper the bondbuying program of 85 million a a month. We see stocks tumbling to the lowest levels since july. Youve seen the move here the biggest since june, june 20th, and the tenyear also notable there. The tenyear note, the yield rose 2. 82 , thats the highest level since august of 2011. So weve had some real monumental moves today. But still bo above 13,000 at the moment 15,000 at the moment. Cheryl well, cisco shares seeing a big decline today following the companys Earnings Report. Profit and revenue grew in the quarter, the Company Announced it would lay off 4,000 employees. It also gave guidance that, well, disappointed wall street. With me now, john chambers, sis is coes chairman and ceo ciscos chairman and ceo. Hello x be thank you for being here. Cheryl, a pleasure to be back with you all again. Cheryl lets talk about this. Earn isly, 4,000 certainly 4,000 job cuts is tough, so let me ask you this, you know, when you were doing the conference call, there was one sentence that seemed to kind of spook wall street. You said you saw mixed and inconsistent economic recovery. Lets look forward, john. What do can you need agencies coe . What do you need from washington . What do you need to maybe make that economic recovery brighter, in your opinion, where you dont have to cut 4,000 people . All right, cheryl, youve asked a series of questions, and if its all right, let me frame it in terms of the quarter. I think its important to understand when i make my comments, our expenses next year will be flat to slightly up. What were doing in the cuts that were making is we have to reinvest very quickly in terms of opportunities that are moving very its in this market. And since we arent as optimistic as wed like to be about the global gdp growth, were doing this from a Caution Point of view very carefully in terms of how we do it. We are communicating to our employees very openly, you said it right, this is the hardest decision you make as the ceo. We met with 18,000 of our employees by telepresence, by video this morning, shared with them what were doing. They get to grill us for literally an hour and 15 minutes with any question, fair game. They understand what were doing and why. But this is a lot different than signaling to the market we think the market is about to turn down. Our progression has been slow, steady increase on our product orders for four quarters in a row. It was a record quarter from a revenue per peckive, the tenth in a row. It was the seventh quarter where weve grown revenue faster than earnings, and we returned to our shareholders from four billion in cash flow 2. 1 billion. So doing that in a market like this and gaining share in areas, including in the u. S. And many product areas, it was a very positive, record quarter our guidance for the next quarter was 5051 cents. The market came out at 51 cents. Thats where it was before our announcement x our guidance in terms of revenue ended up, the consensus was 12,461,000,000,000. It was 110 below that, less than 1 . So i think what a lot of people are missing, were not centralling a heavy signaling a lay off. We have to realign resources quickly or well miss out on the hot Growth Markets that we must play in, and thats the right decision for the company each though its very tough. We communicate very openly with our employees what were trying to accomplish and why. Cheryl is wall street missing something, i think youve explained that. Lets look forward then. Again, you do have that strong dividend yield, that is still in place. Youve got, i think its, what, 32 billion in net cash on hand. You were one of the biggest acquisition makers from 2000 to 2010. Im curious if acquisitions in your future as you try to, quote, refocus the company which other times youve said the same thing, you want to refocus the company. A what do you do with that moneysome. Well, first of all, we have refocused the company to almost all of the major growth opportunities. And you see that in cloud where weve done both internal investment and acquisitions growing to 43 , in mobility and wireless growing to 33 where weve gone from not being a player to the number one player, in Server Technology where weve become number two in the world on x86 servers, growing at over 46 yearoveryear. So we use our act by uses and our investments for where the markets going. We acquired a company for other a billion dollars over a billion dollars, and in that they grew this last quarter 100 quarter over quarter. So in Third Quarter to Fourth Quarter. At a run rate of 250 million. That shows you when you get a great Acquisition Technology wise, with an architecture that we play through world class channels, magical things happen. We acquired source fire for 2. 7 billion, a great acquisition in terms of security. And we were optimistic on where thats going to take us. We return to our shareholders this last year not just the dividends and the Share Repurchase which were 6. 1 billion, we acquired 6. 8 billion of companies with cash, so our return to the shareholders was 12. 9 billion this last year. Cheryl your fiscal Fourth Quarter profit up 18 , and as i said earlier, you are still delivering that dividend. I think sometimes when you speak especially the reason that your words can sometimes, you know, again like its hurting the stock today, and im sure thats tough to watch as ceo is that people view you and cisco as the eyes and ears for the forwardlooking health of the technology sector. And youve got a lot of competition. Youve got hp coming after you, you spoke about the weakness in asia. If be theres one thing that you really do want to refocus on now, is it cloud . You mentioned wireless. I mean, wheres the next phase for you to keep delivering that dividend and to continue to focus on that growth for you . So first of all, cheryl, we took competitive share from both hp and from whatway. If you watch the server market, we now have 20 president market share 20 market share. In terms of the chinese competitors, were very good versus them on a global basis, and part of our growth as we gain is we gain share across the board. We are not a oneproduct company. Think of us as a portfolio of 18 different product families of which we are number one in 13 of them, number two in three and only number three in two, and we make them Work Together to solve our customers problems. The next big thing, the internet of everything. Everything will be connected. It used to be 100 million to the interbe net, we thought that was cool. Youre now at ten billion connections on its way to 50, on its way to 500 billion. It will change health care, it will change education, it will introduce probably 14 trillion in profits into the Global Economy enterprise systems over the next ten years. And that would create a huge number of jobs and directions. Were going to lead in that. So what we do well is we combine these products to solve our customers business problems and in the u. S. As an example our commercial business grew 9 , our Enterprise Business grew 12 . Public sector turned up on a global basis, its up to 6 positive from 6 negative a year ago. U. S. Public sector which actually started a downturn almost two and a half years ago in state and local government, state and local government grew 9 , and our federal business turned positive for the first time in four or five quarters. It used to be down maybe 15 , actually grew at 3 this quarter. So a lot of positive in the markets. Challenges, emerging markets, they were not near as strong as we anticipated. They grew 13 last quarter, only 8 this quarter, and asiapacific and japan we saw similar weaknesses that others did. Cheryl okay, real quick, i have to before i let you go, the consumer business. The consumer business. Are you worried about the consumer side of ciscos business . Well, we are a business to consumer. Were no longer in consumer to consumer. So in terms of businesses like retail interfacing to the consumer, thats a very good Growth Business for us. Manufacturing, building automobiles for the future, a very, very good Growth Business for us, and we did see very, very solid growth on that. So i think the key takeaway, cheryl, is that a our goal is to become the number one i. T. Player in the world, that we are closer to that now than weve ever been, that we had another record quarter with Great Results in most categories when people look at it. The next quarter it was all in expectations for earnings and just a hair off in terms of the revenue level. But what the market read x it was right in terms of ive been very candid, credibility and trust is everything, and ive been very candid. This market is really sending inconsistent messages on gdp growth on a global bay sixer continuing to trend down. And i see spending continuing to trend down according to industry experts. Cheryl john, i certainly appreciate you for addressing so much of the concerns of wall street today and, certainly, were going to be checking back in with you. John chambers, chairman and ceo of cisco. Cheryl, maybe one last quick comment if you have a second. Cheryl okay, real quick. Watch where the stock is two weeks from now, four weeks from now and a quarter from now and see if the market overreacted. Cheryl i will. I will, i will. John, thank you so much. It was good to see you again. Thank you. Cheryl all right, well, turning to todays Big International story, president obama says that the u. S. Deplores the Egyptian Militarys violent crackdown on antigovernment protesters in egypt. The militaryled government says it wants an inclusive political process thats open to anyone who is not involved in violence. At least 578 people have been killed and thousands wounded in the past two cays of clashes days of clashes. Peter barnes has been watching all of this from his perch in washington and has more on what the president had to say today. Reporter thats right, cheryl. The president announced that the United States was going to cancel a scheduled joint military training venture with the Egyptian Military as a result of whats been going on over there. He took a break from his vacation in Marthas Vineyard to make that announcement. Going forward ive asked my National Security team to assess implications of the actions taken by the interim government and further steps that we may take as necessary with respect to the u. S. egyptian relationship. Reporter and that could be freezing u. S. Aid to egypt. 1. 3 billion a year in military assistance. Now, on the economy the violence has so far not affected the suez canal, though oil prices have been moving higher in recent days on concerns that it could have an impact. Tankers move more than two and a half Million Barrels of crude oil a day through the canal, egyptian shipping sources have told reuters that the canal and the countrys ports are operating normally despite all this unrest, and the sources said that the military has deployed significant security at strategic areas. Cheryl . Cheryl peter barnes, live out of washington. Peter, thank you for that. We appreciate it. Closing bell, weve got 46 minute toss go. On a day like today, thats probably good news to a lot of you. Coming up next, the very latest on on toeds big selloff. Were going to go to the cme and the nymex, weve got our floor show coming up. And gold bugs, Pay Attention to this. One of the biggest names, billionaire john paulson, has reversed course on gold. Details on that. Stay with us. 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Cheryl lets get the latest on todays market selloff, traders at the New York Stock Exchange, the cme and, of course, the nymex. Ben willis at the New York Stock Exchange, ben, to you first, theres thoughts about in this major move to the downside. Are you worried, or is this a oneday blip . I hope its not a oneday blip. I dont mean to be too dark, but this market has had one great run this year, and were only in august. The market needs for its health in order to be higher by the end of the year to have a decent pullback, and the biggest pullback we have had so far this year the is about 3. 5 on the s p, and thats not really a healthy correction, so ive been looking for one, as many professional traders have for quite a while, and hopefully this is it. Cheryl kevin, do you agree with that assessment . I do. Look at yields today and you actually see stocks selling off significantly, so its not a flight to quality trade. I think traders are really looking at the data. You saw claims fall, inflation up just a little bit more, datas getting better, so theyre starting to take the feds word to heart here and seeing a little pullback on that monthly bond buying. Cheryl let me take that back to ben willis, when you get jobless claims falling, ben, that means that the feds going to jump in even quicker to begin to taper programs. Isnt that already factored in, ben . Well, the tapering has been factored in by many people i was arguing on this point yesterday on this show with another gentleman from chicago about the tapering. But the fact of the matter is the actual tapering when it does have the anticipation is you will get a knee jerk reaction to the downside in equities, and i believe the market will go higher. These kind of corrections are a buying opportunity to viewers at home. Traders are a whole different animal for a marketplace. If youre a longterm investor, the days like today are when you should be looking to add to your portfolio, not the panic. Cheryl ben with, i hear the bull in your voice, let me bring in Jeff Grossman at the nymex. Jeff, you know, more serious topics, energy markets. There is concern about the suez canal, whether the military assures us that the channels going to stay open, were not sure we can believe them. Is that kind of factoring into the rise that were seeing . Without question. As a matter of fact, based on the way the stock market behaved today, its quite surprising we were at all higher today x thats only because of the uncertainty in the middle east. You have a market here that really has no business being here in respects, even though it has broken out over this. But its only broken out over some of the stuff that took place in the middle east. If you look at it from a technical standpoint, we are about 2 3 bo the moving average above the moving averages, so its showing ahazing strength on the upside and a fact youre probably going to see more of that tomorrow because no one is going to be comfortable going home short over the weekend with the situation there. Cheryl the other side of the coin here, though, is weve talked so much about domestic production, and that we continue as a nation, the u. S. Does, to ge