Technology exchange traded funds were lower Wednesday as Juniper Networks (NYSE: JNPR) shares fell 20% after the network infrastructure provider reported soft quarterly earnings and offered a disappointing outlook.
“We continue to see headwinds in switching, routing and security,” said analysts at Auriga in a note.
“While management pointed to a number of macro-economic and other factors impacting near-term results and maintained an optimistic long-term view, we continue to remain on the sidelines as we see looming switching commoditization and intensifying competition in routing/security which offsets positive secular trends in service provider segment and new product introductions,” they added.
“Juniper faces several head winds in the second half of 2011, notably below-normal second-half service provider spending, a more challenging macro backdrop, and continued Japan weakness,” BMO Capital Markets said.
Tech ETFs followed the broader market lower Wednesday on lingering concerns over the U.S. debt ceiling. Technology Select Sector SPDR Fund (NYSEArca: XLK) and PowerShares QQQ (NasdaqGM: QQQ) both slipped 2%.
One bright spot in the sector was Amazon.com (NasdaqGS: AMZN), which added 5% in the wake of strong quarterly revenues and a solid outlook. “We believe that the lower-priced Kindle with special offers is driving mass adoption of the device and contributing meaningfully to revenue growth,” Jefferies analysts said.
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