Cisco's Memory Bill: A Sign of a Broader Chip Shortage

Cisco Systems dropped 9% on Thursday after reporting record revenue and earnings for its fourth quarter, but shrinking gross margins due to soaring memory costs.

The company's stock fall cost the Dow Jones Industrial Average around 68 points, while other chipmakers such as Micron Technology and SanDisk gained, with Micron up 5.1% and SanDisk surging 13.5% after an investor day presentation.

July producer prices were unchanged for the month, but core PPI rose 0.2%, while Goldman Sachs helped rescue the Dow with a 1.1% gain for about 68 points, offsetting Cisco's damage.