Software stocks were struggling in early trading after J.P. Morgan downgraded many stocks in the sector and lowered estimates on the whole group as a result of a worsened economic outlook.
J.P. Morgan downgraded
to long-term buy from buy, and downgraded
to market performer from long-term buy.
Quest was down 2.5%, Websense was down 5.5%, Embarcadero was down 10.3% and Red Hat was down 3%.
J.P. Morgan said several stocks remained favorites despite the potential for continued sector weakness, including
Microsoft was down 4.9%, NetIQ was down 7.3% and Mercury was down 3.2%.