Motorola (NYSE: MOT) tumbled 15 percent, or 15 1/2 to 89, Wednesday after Salmon Smith Barney cut its investment rating on semiconductor and wireless services company.
Smith Barney cut its rating from "outperform" to "buy," and lowered its price target on the stock to $120 from $200, reportedly on the basis that it was not going to be able to meet projected growth. Analyst Alex Cena was not available for comment.
Bear Stearns also initated coverage of the stock with a "neutral" rating.
Competitors Nokia (NYSE: NOK), down 3 1/16 to 50 13/16, and Ericsson (Nasdaq: ERICY), down 1 19/64 to 19 33/64, were also affected by the rating.
The downgrades aren't totally a surprise. The company warned of lower-than-expected profits last month.
"Motorola is a significant peer group for these telecom equipment makers, so when news on Salomon's downgrading started to spread, Nokia started to fall," analyst Michael Schroder at Opstock told Reuters.
"There is no value-linked argument for this fall, it is more a question of market-level uncertainty ahead of the interest rate decision," he said.