Updated from 7:42 a.m. EDT.

Juniper Networks

(JNPR) - Get Report

was down 6.6% in active trading early in the session following comments from Merrill Lynch late Tuesday.

In a research note, Merrill cited lackluster business for high-end routers and said the overall market will likely contract up to 10% during the third quarter. Accordingly, Merrill trimmed its third-quarter earnings estimates on Juniper to 8 cents a share from 9 cents, and cut its 2001 estimate to 50 cents from 52 cents. It also cut the 2002 estimate to 55 cents from 66 cents.

Merrill reaffirmed its accumulate rating on the stock, saying Juniper was "a premier technology company in a cyclical downturn" that will nonetheless test investors' patience before it sees sustained improvement.

Shares of

Cisco

(CSCO) - Get Report

, the leader in the router business, recovered from the preopen slump that followed Merrill's remarks and were up 0.4%.

Meanwhile, shares of optical network equipment maker

Ciena

(CIEN) - Get Report

were up 2.3% on speculation that the stock's inclusion in the

S&P 500

, announced last week, would begin after the close.