Reversal of Fortune

"Network Appliance's (NTAP Quote) warning is not an isolated incident," Bob Faulkner, author of TheStreet.com's Telecom Connection, tells Aaron Task on Thursday's "The Real Story" podcast."Cisco (CSCO Quote) also said it's seeing weakness in North American enterprise spending," Faulkner says.

Network was among a slew of tech companies in the dreaded "Geoff Tate Zone" Thursday, along with Komag (KOMG Quote) and Synopsys (SNPS Quote).

As with the broader market, tech firms with exposure to international economies are faring better than those focused on the U.S., Faulkner says. "There's no sign of an upturn in capital spending."

The comments came on a day when better-than-expected durable goods and new-home sales data spurred an early rally, but the market suffered a major intraday reversal of fortune.

The selling was concentrated in recent winning sectors, such as energy, commodity-related stocks and emerging markets, says Task, who notes the trend of a shrinking supply of stock also reversed Thursday with IPOs from Greenlight Capital Re (GLRE Quote) and Navios Maritime (NM Quote), while Dolby Laboratories (DLB Quote) priced a 7 million secondary and Express Scripts(ESRX Quote) split 2 for 1.

"The broader trend of shrinking supply is still intact because of all the M&A activity and corporate buybacks, but we need to watch the new issue calendar to see if the trend starts to shift," Task says.

Task's second guest, David Peltier, came on for a bonus edition of "Should I Buy It?" and tackled stocks such as Apple Computer (AAPL Quote) and VeriFone (PAY Quote), as well as the outlook for the utility sector, a big loser Thursday.