Markets: News  

Ciena hits networking, Angie's List falls

SAN FRANCisco (MarketWatch) -- Networking shares took a hit Thursday as Ciena Corp.'s forecast appeared to dampen expectations of stronger spending in the telecommunications industry in the second half of the year.

The tech sector also was weighed down by slumping shares of Angie's List(ANGI) after the stock was downgraded by Canaccord Genuity.

Ciena (CIEN) shares fell 19.5% to close at $13.46 after the maker of networking gear posted disappointing earnings and a weaker-than-expected revenue forecast.

"Management has so far given no specific reason for the disappointing revenue guidance, stating simply that 'we are experience the effects of ongoing macroeconomic challenges and slower than expected roll-outs of new design wins,'" Nomura analyst Stuart Jeffrey wrote in a note.

"These comments around slower roll-outs appear to contradict recent commentary by operators regarding solid second half spending plans," he added.

Other networking stocks also took a hit. Juniper Networks(JNPR) lost 4% to close at $17.75 and JDSU (JDSU) shed 5.8% to close at $11.07 and Cisco Systems (CSCO) gave up 1.6% to close at $18.90.

In a note, Wedbush analyst Rohit Chopra said "Weakness at Ciena suggests that an imminent rebound in carrier capex spending is unlikely to materialize."

Amazon.Com(AMZN) shares were down a fraction, closing at $246.22. The stock was up earlier in the session after the e-commerce giant said its Kindle Fire tablet has sold out. The company is holding an event next week in Los Angeles at which it's expected to introduce an updated version of the device. Amazon said the Fire has garnered about 22% of tablet sales in the U.S. over the last nine months, but gave no specific sales figures.

Shares of Angie's List slipped 5.5% to close at $9.66 after the online review site was downgraded to a hold rating by Canaccord Genuity.

In a note to clients, analyst Michael Graham argued that the company "may stay in investment mode for longer than originally anticipated."

"We continue to believe Angie's List is building a sustainable model, but believe delayed profitability may dampen near-term stock appreciation potential," Graham wrote, lowering his price target on the stock to $12.50 from $20.

The tech sector got a lift from shares of Pandora Media(P) which jumped 14.3% to close at $11.52 a day after the Internet radio company's upbeat results.

But technology shares were mostly lower as the Nasdaq Composite Index (COMP) shed 1.1% to close at 3,049. The Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia Semiconductor Index (SOX) were each off more than 1%.