Nortel Leads Optical-Related Stocks Sharply Lower

Updated from 12:48 p.m. ET

The networking sector got walloped Wednesday.

Shares in networking-equipment stalwart Nortel (NT Quote) plunged after the company on Tuesday disclosed third-quarter revenue that failed to meet Wall Street's highest expectations. Shares in other optical highfliers followed suit, as Nortel's failure to match the second quarter's 150% optical-equipment revenue growth sent shivers through a highly priced sector.

The sharp declines came despite the fact that Nortel noted the underlying strength of its business and remained steadfastly bullish, predicting that its customers would boost their spending by 20% to 25% for 2001. ...