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Optical/IP

Light Reading Index Rallies

Tech stocks rallied today and brought the Light Reading Index along for the ride. The Index closed up 40.51 (5.82%) to 736.48. The Nasdaq was up 116.39 (4.61%) to 2640.57.

Ciena Corp. (Nasdaq: CIEN) climbed on news that Thomas Weisel Partners initiated coverage with a Strong buy rating. Analyst Hasan Imam’s report predicts that Ciena will nearly double its revenues in 2001. The report states, “We believe that Ciena (CIEN) is emerging as the leading optical systems vendor for next-generation carriers. Competing head-to-head against Nortel Networks Corp. [NYSE/Toronto: NT], Ciena is gaining ground.”

Ciena was one of the top performers on the Light Reading Index for 2000 gaining 180 percent on the year (see Ciena's Banner Year). Only Newport Corp. (Nasdaq: NEWP), which makes manufacturing gear for use by components companies, performed better, with a 415 percent return on investment. Ciena was up today 6.50 (8.23%) to 85.44, and Newport was up 8.88 (11.51%) to 86.00.

Cisco Systems Inc. (Nasdaq: CSCO) righted itself after its boat got rocked yesterday on concerns that its sales might be slowing down (see CIBC Downgrades Cisco, Juniper). But CEO John Chambers seemed to allay fears with his encouraging words and charm, addressing a group of investors yesterday (see Chambers: Cisco's Ready to Brawl). Further, Credit Suisse First Boston lowered its revenue estimates to $37.1 billion from $41 billion but maintained its Strong Buy rating. Cisco was up 2.47 (6.81%) to 38.72.

The day’s biggest percentage gainers were Advanced Fibre Corp. (Nasdaq: AFCI), up 3.94 (20.32%) to 23.32; Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7), up 6.38 (21.16%) to 36.50; Avanex Corp. (Nasdaq: AVNX), up 6.81 (15.24%) to 51.50; Harmonic Inc. (Nasdaq: HLIT), up 1.19 (15.57) to 8.81; Foundry Networks Inc. (Nasdaq: FDRY), up 3.25 (6.53%) to 15.50; ONI Systems Inc. (Nasdaq: ONIS), up 5.00 (16.84%) to 34.69; and Redback Networks Inc. (Nasdaq: RBAK), up 7.38 (18.04%) to 48.25.

-- Matt Malina, research associate, Light Reading http://www.lightreading.com

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