While analysts debated the health of

Nortel

(NT)

with swords drawn, some of the networking giants slid down with it Friday.

This morning

Banc of America Securities

analyst Chris Crespi asserted that some of Nortel's biggest customers had stockpiled Nortel's optical equipment in the third quarter, causing it to miss revenue expectations in 2000. The fallout from his remarks was affecting not just Nortel's stock, but other optical components makers as well. (

TheStreet.com

wrote a separate story about these

inventory questions.)

Crespi's remarks about Nortel's business slowdown, and the possibility that it may have lost business from

Qwest

(Q)

to competitor

Ciena

(CIEN) - Get Report

, apparently prompted a countering research note. The note was penned by

Merrill Lynch

analyst Thomas Astle, who repeated his buy rating on the stock and characterized the talk, which first surfaced Thursday, as speculation.

Nortel also responded, saying that it had neither lost customers to Ciena nor laid off employees.

Even so, optical component maker

Corvis

(CORV) - Get Report

continued to feel the fallout from the talk. Corvis closed down $5.69 or 14.6% to $33.31.

Also sliding steeply were two fiber-optics component makers.

Newport

(NEWP)

ended down $8.75, or 11.6%, to $69.56 and

Avanex

declined $5.38, or 6.8%, to $75.19.

Chip maker

Applied Micro Circuits

(AMCC)

closed down $5.56, or 9.1%, to $55.69. Applied had also lost 13% of its value the day before, after a note from Merrill Lynch about inventory oversupply in the type of communications chips it manufactures.

Two quarters ago Nortel accounted for 40% of Applied's revenue, Sandy Harrison, analyst at

Pacific Growth Equities

said. But for the past three quarters the company has made a point of diversifying its client base. For this reason, speculating that its Nortel exposure is the only cause of the decline in Applied's share price may not be entirely on point, he noted as a caveat.

A note by analyst Joe Valenzuela of

Fechtor Detwiler

may have put more pressure on optical component makers' stocks. Valenzuela wrote that low-cost manufacturers from Asia were moving into the opticals market offering cheaper components as a way of gaining market share.

After dropping more than 6% Thursday during the height of the speculation, optical leader

JDS Uniphase

(JDSU)

was trading slightly higher today, closing up $1.63, or 2.4%, to $70.13.