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The early trading in Cisco (CSCO) - Get Cisco Systems Inc. Report this morning after it reported earnings last night recalled Latka Gravas on Taxi: "Boy, America is a tough town."

But investors relaxed, and the selling ended after about an hour or so, and Cisco's shares finished up on the day, gaining 3% to $56.75. However, the market didn't lift the stocks of other networking stocks today, and while some of that can be attributed to pre-election malaise, some investors still found the performance by Cisco and others underwhelming.

The feelings surrounding the technology sector are a mix of positive ones and uncertainty. Investors believe technology stocks, by and large, have corrected to a point where valuations look enticing, but the cloudy economic forecast has investors confounded right now. The

Nasdaq Composite Index is still down about 33% off its all-time closing high; yet tech stocks with high

price-to-earnings ratios can't get moving.

Good News. Right?

Cisco reported earnings of 18 cents a share, beating the forecast by 1 cent. It also guided analysts' earnings estimates higher by 2 cents to 5 cents for 2001 and released a positive forecast for revenue. Yet, the stock opened at $53, down $2.13.

"It seems like a pretty good entry point," said Eugene Profit, chief investment officer at

Profit Investment Management

in Silver Spring, Md. "As long as the bull market continues, we'll remember this as a period that you could have gotten Cisco at $57."

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Cisco continued to move higher through the early afternoon before hitting a ceiling (for today) around $57, and managers' enthusiasm grew as the stock sustained its rally. Looking into the near future, they displayed a bit more uncertainty about Cisco and technology. One trader, today, said Cisco's rally, and the rally of other big-cap technology stocks, felt like "a bear-market rally," that is, another opportunity to sell stocks.

"The only thing I'm worried about is, high P/E stocks aren't going to see the momentum they've seen in the last three years," said Brian Gilmartin, portfolio manager at

Trinity Asset Management

. "You could see improving fundamentals, and yet the stock is going to go nowhere. I want to see the momentum investors come back."

But what's going to bring them back? Gilmartin and others said a bit of clarity in terms of the economic picture would help. Perceptions are leaning toward an economic slowing more significant than reality, and with continued tightness in labor markets. That leaves the

Federal Reserve unlikely to alleviate investor jitters about tightening credit by cutting interest rates (a bit of a pipe dream now), because the Fed remains worried about wage-related inflation.

Although earnings growth increased by about 18% for

S&P 500 companies during the third quarter, expected earnings growth for the fourth quarter has been revised down to 11.8% on Nov. 3 from 15.6% on Oct. 1. For the first quarter, growth is expected at 10.9%, down from an earlier estimate of 14.2%. That's a significant slowing, and the most significant downward revisions have been in the technology and communications-services sectors. So being unwaveringly optimistic is hard, but some people are still giving it a try, at least with Cisco.

"I guess you have to focus on the fundamentals, stick with the stocks you believe in and let the macroeconomic issues work themselves out," Gilmartin said.