A cautious outlook from the technology sector’s networking-equipment giant and industry bellwether didn’t assuage investors about the economic future, sending tech stocks and related exchange traded funds (ETFs) downward. It’s a turn of events for a sector that contributed to much of the growth in the first half of the year.
Chief Executive John Chambers of Cisco Systems (NASDAQ: CSCO) commented on “mixed signals” and an “unusual uncertainty” after first-quarter sales were lower-than-expected, reports David Benoit for The Wall Street Journal. [Semiconductor ETFs Facing Choppy Waters.]
This additional sign of the tech sector‘s lack of strength as compared to earlier estimates depressed the Nasdaq this week – it’s down 4.5% in the last five trading days. Cisco opened down 11% on Thursday after two analysts, BMO Capital and Oppenheimer, downgraded the firm’s outlook on Chambers’ remarks. The stock has lost 20% in the last three months.
The tech sector is suffering from weak personal-computer orders and many analyst firms have already downgraded the entire sector semiconductor sector as a result.