Cisco Spins Its Wheels in Slowdown

A slowing pace at Cisco (CSCO Quote) jammed up the communications equipment sector Wednesday.

Shares across the industry skidded after the San Jose, Calif., maker of Internet traffic-management gear suggested the widely anticipated tech spending rebound is losing traction. Wall Street analysts stepped in with a series of downgrades, goosing a broad tech selloff.

After posting solid fiscal fourth-quarter numbers Tuesday, Cisco chief John Chambers, in his self-appointed role as economist, warned that CEOs he has talked with recently have grown more cautious in their outlook.

The comments, along with surging inventory levels and higher projected operating costs, sent Cisco shares down 10% Wednesday. The selloff, which knocked the stock down $2.03 to $18.43, puts Cisco within a dollar of its 52-week low and leaves it more than 33% below its 52-week high. ...