Bear Stearns Cuts Rating on EMC, Sun Microsystems

Bear Stearns

lowered its investment ratings on computer hardware and software equipment suppliers

EMC

(EMC)

and

Sun Microsystems

(SUNW) - Get Report

to attractive from buy.

In his research note, analyst Andy Neff said that while both EMC and Sun "are leaders," he expects a slowdown in corporate IT spending to "impact both companies' financial performance," adding that "gravity is bound to take over."

Neff said that he sees signs of weak consumer demand in the PC market, which has "continued to deteriorate," and indicated that the sluggishness was spreading into small- and medium-sized corporate customers. Neff downgraded PC stocks in September, citing concerns about weak demand.

After Thursday's bell,

Microsoft

(MSFT) - Get Report

dropped a

bomb, warning that weakening PC sales, corporate IT spending and online advertising would lower its second-quarter earnings and revenue.

Shares of EMC recently fell $4.63, or 6.2%, to $70 on the Big Board. Sun lost $1.31, or 4.1%, to $30.38 in

Nasdaq

trading.