After a sharp plunge early Monday, the already depressed networking equipment sector was recovering but generating little enthusiasm.
Traders who started selling their
shares at the open soon found some reasons to buy here and there. But the mood remained cautious, and few investors seemed inclined to make a big bet while fear remains the prevalent emotion.
Even after the Fed
cut its fed funds rate to 3% from 3.5%, investors who returned to the market for the first time since Tuesday's terrorist attacks on New York and Washington were saying one thing but doing another.
"Everyone was saying they wouldn't sell, but no one was saying they were going to buy," said one Boston-based buy-side analyst. As trading started, the analyst said he was trying "not to overreact and be opportunistic when possible."
Meanwhile, another trader, a New York-based hedge fund manager, says he was pushing hard on the sell button. Given the last year's plunge in tech spending and the steady deterioration of the economy, the trader was bracing for a big hit. He said that going into the day, even after the rate cut, he was "selling all the way."
Cisco, which has
temporary regulatory blessing to buy back its shares in the wake of the terrorist attacks, hit a 52-week low of $13 shortly after the open before recovering to $14.11, down 2.5%.
Shares of phone network gear makers Lucent and Nortel also skidded early before reversing field. Lucent was down as much as 7.5% but was down just 2.5%, at $5.80, at midday. Nortel hit its own 52-week low of $4.99 early Monday before rallying to $5.15, down 3.7%.
Optical networking shop Ciena, which dropped $1.02, or 7.6%, to $12.39 at the get-go Monday, was down just 13 cents at $13.28 around midday.
Some stocks, particularly those that had been beaten down severely in recent months, seemed to be attractive picks at their new lower prices, but interest remained tepid. The shares of the sector's leaders, such as Cisco, Nortel and Lucent, have all fallen 70% and more over a year.
"It's time to position for a recovery at lower prices, but we aren't making any big bets here," says the Boston-based analyst.
Some of the stocks the trader finds attractive include phone switching upstart
, media giant
AOL Time Warner
and wireless outfit
"The big problem is the economy is so weak in front of the attack," says the analyst. "It makes it tougher to get aggressive."