Three months ago, Cisco Systems (CSCO) Chief Executive John Chambers sparked a sell-off in technology stocks when he highlighted soft spending by U.S. companies. The comments left investors asking whether the decline would persist. On Feb. 6, they got their answer.
During a conference call with analysts, Chambers said Cisco's revenue would rise a mere 10% in the quarter that ends in April. That's short of the 15% growth Wall Street had expected. Investors, who hang on Chambers' every pronouncement as a gauge of computer industry health, took the remarks as a sign that U.S. companies are cutting back on tech spending. Yet they weren't assuaged by his assurances that the slump would be short-lived. In extended trading, Cisco stock tumbled, dragging down shares of other marquee tech-sector names.