Wednesday March 19 12:24 PM EST
Networking stocks lead tech decline
NEW YORK, March 19 (Reuter) - Technology stocks' abuse continued Wednesday, with
networking companies leading the decline amid reports of slowing Internet equipment sales,
traders and analysts said.
"Cisco and the like opened down on comments of Internet sales slowing down," said said Jack
Bayer, managing director and head of over-the-counter trading at Oppenheimer & Co.
The selloff in technology issues "is a continuing trend here, with even the big ones like Intel Corp
starting to go now," Bayer said. Intel Corp lost 3-3/8 to 133-3/8.
Analysts said executives from Cisco Systems Inc and 3Com Corp made comments at separate
industry conferences suggesting that Internet equipment sales have slowed in the United States.
Cisco and 3Com could not be reached.
Those comments rocked networking stocks, sending Cisco down 2-3/8 to 48 and Ascend
Communications Inc off 5-5/8 to 42-1/2 in heavy trading.
But analysts said the scare was overblown.
"Ascend has a huge backlog right now," said Chris Stix, an analyst with Cowen & Co. Stix said
the market "very much" overreacted to the sales warning.
Hambrecht & Quist analyst Joe Noel said in a research report that although there is some
evidence that growth may be slowing, the recent selloff in networking and telecom equipment has
been "overly severe and far too widespread among the companies in the group."
Noel said the networking sector is fundamentally healthy.
Companies such as Ascend, Pairgain Technologies Inc and Tellabs Inc have seen strong sales in
the March quarter and could beat Wall Street earnings estimates, Noel said.
International markets will serve as a major source of growth for the networking industry, but some
companies such as Cisco have seen weakness in certain markets such as France, Germany and
Italy, Noel said.
Some product transitions may also hinder's Cisco's near-term performance, analysts said.
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