Nortel Networks will sell another piece of its business for $769 million as part of its bankruptcy proceedings, which require it to dismantle its business.
Despite the Dow falling to 12-year lows, Ciena and Leap Wireless were among a handful of tech stocks trading higher.
The settlement brings to a close the latest squabble over the two companies' technology rights.
After a two-year moratorium on lawsuits, Ciena is back in court to accuse Nortel of patent infringement.
The optical gear maker will spend $636 million on two start-ups as it tries to expand its market and return to profitability.
Among the chosen are Alcatel, Ciena and Cisco. Absent from the list is Marconi, whose stock dives on the news.
The networking gear maker reports a net loss of $88.9 million, but it is challenged to predict the timing of some revenue in the current quarter.
The optical-networking company says it is laying off 10 percent of its staff amid an increase in outsourcing and announces that it expects positive fourth-quarter results.
Telecom carrier AFN Communications selected optical telecom equipment maker Ciena on Wednesday as its primary gear supplier. AFN already operates 2,000 miles of its 8,000-mile fiber network, which runs through 13 states in the northeastern United States, and will light the rest with Ciena's CoreDirector, MetroDirector and CoreStream gear. The deal is Ciena's first contract as a carrier's primary supplier. AFN started in 2000 and built its network by interconnecting the fiber and other network assets of six utility and telecom carriers, which in return received equity in AFN. The company mainly provides connection services to other telecom companies, wireless carriers and Internet service providers.
Chairman Patrick Nettles remains confident about his company's ability to navigate industrywide problems as well as stepped-up competition from larger rivals.