Corrected: Cisco gives weak outlook; tech shares down

(Corrects fiscal quarter end to Jan. 26, not Jan. 25; the error first occurred in UPDATE 1)

NEW YORK/SAN FRANCISCO (Reuters) - Cisco Systems Inc gave a disappointing outlook on Wednesday and warned of a rapid slowdown in U.S. and European orders, driving its shares down 8 percent and adding to broader fears of a U.S. recession.

"We do think there is a very cautious attitude in the boardroom and that is different from six months ago."

Stalwarts like Apple Inc and Intel Corp have set financial targets short of many Wall Street estimates, while Google Inc reported soft revenues and Yahoo Inc said it faced 'headwinds' and planned to cut jobs.

Cisco, the largest maker of the routers and switches that direct traffic on data networks, forecast fiscal third-quarter revenue to rise 10 percent, short of the 15 percent growth expected by Wall Street, according to Reuters Estimates.

The news dragged down tech shares in extended trading, with Hewlett-Packard Co , IBM , Microsoft Corp and Google all down between 1 percent and 2 percent.

ORDERS SLOW

While investors have debated for months what impact the slowdown in the U.S. housing sector and its spread into other consumer markets would have on the global economy, the quarterly comments from Chambers have oracular powers.

"It's November all over again," Dinosaur's Garrity said. "He serves to drive the confirmation of what investors fear ... When John Chambers talks, people listen."

Cisco said the European slowdown was from phone companies and the public sector, while in the United States, retail and transportation weakened and the financial sector bounced back.

"I don't mean to imply in any way we see things spiraling down," Chambers said. "I think this is going to be relatively short term based on what we're hearing from our customers and other groups."

Earnings per share before unusual items were 38 cents, matching the average analyst forecast according to Reuters Estimates. Sales rose 16.5 percent to $9.8 billion in the quarter, also in line with expectations.

(Additional reporting by Eric Auchard in San Francisco, Jim

Richard Chang and Braden Reddall)

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