Morgan Stanley Dean Witter

cut its ratings and price targets on several European telecom equipment and technology companies, a sector that has been slogging through an industry-wide spending slowdown.

Morgan Stanley cut its price target on

Philips Electronics

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, which is based in Amsterdam, and

Alcatel

(ALA)

, of Paris, and downgraded both companies' ratings to outperform from strong buy. The investment bank also downgraded Finland's

Nokia

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and Sweden's

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Ericsson

(ERICY)

, taking both mobile-phone makers to a neutral rating from an outperform.

While Morgan maintained its rating of strong buy on

Alcatel Optronics

(ALAO)

, the firm cut its price target on the stock. The firm also kept its outperform rating on

Marconi

(MONI)

, but again lowered the price target. Morgan Stanley also reduced its price target on

ASM Lithography

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.