Thomas Weisel Cuts WebMethods

Analyst Tim Klasell trimmed the software firm's rating amid a spending slowdown

Thomas Weisel downgraded WebMethods (WEBM ) to buy from strong buy.

Analyst Tim Klasell says nearly all Systems Integrators are seeing a slowdown in software spending. He thinks it is prudent to reset investors' expectations, including lower estimates and targets, as well as downgrade ratings across most of the software names. But he believes in times of uncertainty it is important for investors to focus on market leaders, as these companies often are beneficiaries of being a customer's "safe purchase" in a negative economic environment -- and these firms often emerge from a recessionary period stronger than their smaller competitors. Klasell recommends investors focus on industry leaders including BEA Systems (BEAS ), Interwoven(IWOV ) and Netegrity (NETE ).

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