Nasdaq stocks have bounced back in recent action, following yesterday's selloff, with networking and telecom-equipment issues little affected by a downgrade from the Bernstein bears.

This morning,

Sanford C. Bernstein

-- which does not underwrite stock and is valued for maintaining independence from companies -- cut its ratings on networkers

Cisco

(CSCO) - Get Report

and

Nortel Networks

(NT)

to market perform from outperform.

In his research note, Bernstein's telecom equipment analyst, Paul Sagawa, said he is concerned about a decrease in spending on telecommunications equipment. Expenditures are likely to show "sharp deceleration" from 28% in 2000 to 20% in 2001, Sagawa noted.

It is only a matter of time, the analyst believes, before optical plays -- which provide their equipment to the telcos -- will be affected by spending cuts. In the Heard on the Street column in today's

Wall Street Journal

, Sagawa said that "investors keep looking for where to settle and where to sit and fell comfortable about growth. Right now, the world feels the only safe place is optical."

Indeed, fiber-optic plays have been white-hot lately. Shares of

JDS Uniphase

(JDSU)

,

Juniper Networks

(JNPR) - Get Report

, and

Corning

(GLW) - Get Report

have all performed very well during the month of September.

And not everyone on Wall Street is so worried.

Merrill Lynch

this morning came out in support of Cisco and Nortel, reiterating its buy ratings on both companies while acknowledging that the stocks could be weak for the next few weeks. Similarly,

Salomon Smith Barney

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reiterated its buy rating on Cisco.

According to Tim Grazioso, manager of Nasdaq trading at

Cantor Fitzgerald

, "The Bernstein call has already been priced into the market."

In recent trading, shares of Cisco were off 6 cents to $57.25, while Nortel was up $3, or 5%, to $62.63. Among fiber-optic names, JDS Uniphase was up 0.3%, Juniper Networks was up 1.3% and Corning was up 0.3%.

"After we get through the morning," said Grazioso, "we can expect to see a rally for the next day and a half."

Many of the Internet names beaten up yesterday on the heels of

priceline.com's

(PCLN)

profit warning yesterday have recovered ground. Shares of priceline.com, which lost a whopping 42.3% of its value yesterday, recovered 8.1%. Meanwhile, shares of Net stocks that fell in sympathy were higher on the day.

eBay

(EBAY) - Get Report

was up 8.2%,

DoubleClick

(DCLK)

was up 0.9% and

Amazon.com

(AMZN) - Get Report

was up 4.8%.

Yahoo!

(YHOO)

shares, down yesterday with the Net stocks, was lately up 7.1%. Reiteration-happy Merrill Lynch this morning repeated its buy rating on the stock. The firm's Internet analyst, Henry Blodget, wrote that "we remain very confident that the company will meet or exceed our third-quarter estimate of revenues of $280 million."

On the merger front,

Exodus Communications

(EXDS)

this morning said it has agreed to acquire

Global Crossing's

(GBLX)

GlobalCenter Web-hosting unit for about $6.5 billion in stock. A deal was initially aborted two months ago. Exodus was down 5.9% in recent trading this morning, while Global Crossing was up 7.5%.