McData Stumbles

McData plunged more than 17% Monday after warning that third-quarter earnings and revenues will come in lower than analysts expected.

McData has been locked in a price war with Brocade and Cisco in the storage switch market. And with two acquisitions announced Monday, McData plans to make that rivalry even hotter, and put pressure on CNT too.

Brocade and CNT fell on the news, but Cisco edged higher.

The broader market sagged under downgrades to Dow heavyweights Caterpillar and Alcoa .

The Nasdaq slipped 1 to 1764, the S&P 500 gained fractionally to 993, and the Dow lost 31 to 9317. Volume declined to 957 million shares on the NYSE, and 1.12 billion on the Nasdaq. Decliners led 19-13 on the NYSE, and 18-13 on the Nasdaq. Downside volume was 61% on the NYSE, and 59% on the Nasdaq. New highs-new lows were 55-12 on the NYSE, and 119-12 on the Nasdaq.

Intel slipped after CEO Craig Barrett tempered Friday’s bullish forecast by saying it is “too early to suggest it is a total turnaround.”

RealNetworks fell 8% on security concerns.

Macromedia rose 6% on a product overhaul.

Level 3 and SBC slipped despite extending their alliance.

SGI gained 10% on Linux plans.

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