A day after computer maker Dell Inc. warned of softening demand for information technology products, Nortel Networks Corp. lowered its 2008 sales outlook in a sign that the economic downturn is not sparing the tech sector.
Nortel's shares sank $2.16, or 40.8 percent, to $3.14 in morning trading. Earlier, the stock hit $3, its lowest price ever.
Dell's shares fell 23 cents to $15.74. On Tuesday, the stock plunged to its lowest level in a decade, which prompted Citi Investment Research analyst Richard Gardner to reiterate a "Buy" rating on Dell and call the shares "oversold."
Furthermore, technology products distributor Ingram Micro Inc. warned Tuesday that its third-quarter results will be lower due to weaker-than-expected results for early September.
Goldman Sachs analysts Min Park and David C. Bailey said in a client note that, "despite the weakening market, we would stay with Ingram Micro."
"While incremental softness in end demand and a more aggressive pricing environment are leading to lower near-term results, we would add to positions on weakness," the analysts wrote in a client note, citing the company's "market leading position and the stock's low valuation."
Shares of Ingram Micro fell 44 cents, or 2.6 percent, to $16.61.
Shares of hard drive maker Seagate Technology, which took a big hit Tuesday, climbed 2 cents to $12.11. Dell shares added 7 cents to $16.05.
SanDisk Corp. shares provided a bright spot in the tech sector, as the flash memory maker's stock soared $6.96, or 46.3 percent, to $22 following its rejection of a takeover bid from Samsung Electronics Co. SanDisk called the $5.85 billion offer "inadequate."
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