Shares of Cisco Systems Inc., the maker of gear that helps to power the Internet, fell in massive trading on Tuesday as analysts and portfolio managers said the technology bellwether's earnings warning could mean more bad news for the sector.

The stock fell 54 cents, or about 3 percent, to $16.66 on Nasdaq after earlier dropping as low as $15.80. More than 175 million shares were traded, including more than 34 million in the first 15 minutes of trading. 

The heaviest one-day trading volume for a Nasdaq stock is Intel, with 308.73 million shares traded on Sept. 22. No. 2 is Cisco, with 281.62 million shares changing hands on Feb. 7, the day after the company reported fiscal second-quarter results that missed expectations. 

Over the past year, Cisco stock has underperformed the Nasdaq 100 index by about 48 percent. 

Cisco said on Monday it plans to cut 8,500 jobs, or 17 percent of its work force; take charges of as much as $3.7 billion; and report third-quarter results far below forecasts as the economy and customer spending continue to slow. 

The San Jose, Calif., computer networking giant's warning sent a shiver through the technology sector. Shares of competitors and suppliers alike declined in after-hours trading on Monday as investors worried that the technology sector had yet to hit bottom. 

``The bad news stretches as far as the eye can see, with no light at the end of this particular tunnel,'' Sanford Bernstein analyst Paul Sagawa said.

Quarterly Revenue Declines Seen 

Cisco Chief Executive John Chambers said on Monday that revenues would fall 30 percent to about $4.72 billion in the third quarter ended April 28 from the previous three months and projected a sequential decline of as much as 10 percent in the fourth quarter. He added third-quarter per-share earnings will be in the very low single-digit range, and likened the dramatic slump to a 100-year flood that rarely occurs. 

The company plans to report third-quarter results May 8. 

Lucent Technologies Inc., Nortel Networks Corp. and Cisco's other rivals have all either announced large job cuts or issued profit and sales warnings. 

ING Barings analyst Tom Lauria said he expects Nortel and Lucent to further reduce their earnings outlooks. 

``You still have a black hole ahead of you in terms of when demand is going to at least stabilize and possibly turn up,'' said Jaye Morency, portfolio manager with Boston-area investment firm David L. Babson & Co. 

Even some of Cisco's smaller, more nimble competitors, such as Juniper, have seen business slow, and networking start-ups are finding it far more difficult to tap venture capital to build out their businesses. 

Analysts said struggles by Cisco and its competitors will also affect their suppliers, including communications chip maker PMC-Sierra Inc. and such contract manufacturers as Jabil Circuit Inc., Solectron Corp., Flextronics International Ltd. and Sanmina Corp. 

Spending Halt 

``Spending ground to a halt in December and hasn't really picked up,'' said Larry Seibert, portfolio manager with New York money manager Barrett Associates. ``Companies are really just holding off. At some point, the dam will break a little bit and there will be a little bit of spending, but right now everyone is seeing who will blink first.'' 

Dresdner Kleinwort Wasserstein analyst Ariane Mahler said Cisco's $2.5 billion inventory write-off raised concerns demand is not improving any time soon. ``I'm trying not to be in denial of what's going on,'' she said. ``Realistically, we may be into a one-and-a-half to two-year down cycle.'' 

Chambers has been sounding increasingly grim notes of caution for months. In January, he said the then-current second quarter was a ``little bit more challenging'' than anticipated. 

Later that month, at an economic conference in Switzerland, his statement worsened to ``more challenging than we anticipated.'' And when Cisco reported second-quarter results, he said, ``The next several quarters will be challenging.'' 

Sanford Bernstein's Sagawa doesn't see spending with telecommunications carriers bouncing back until 2003, and corporate customers aren't likely to boost their spending until next year. ``While I agree that it doesn't get worse, I also don't see any reason it gets any better for a while,'' he said. 

While some analysts think the bad news offers a buying opportunity on Cisco stock, others believe it will continue to fall. Sagawa still rates Cisco a good long-term buy, but called investments in the company ``at best dead money'' for the next six to 12 months.