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EMC's Juggling Act: Page 3 of 5

Still, none of EMC's news has hit the market favorably. The company's stock spiraled down 11.7 percent in mid-morning trading today, and indications are that most of the other companies in the storage sector are being pulled down with it.

Brocade Communications Systems Inc. (Nasdaq: BRCD)
dropped 8.13 percent to $17.63; Network Appliance Inc. (Nasdaq: NTAP)
slipped 7 percent to $8.48; and McData Corp. (Nasdaq: MCDT) fell 7.55 percent to $10.18 a share.

These figures echo a rash of downgrades amongst storage analysts. Friedman Billings lowered it rating for EMC from “accumulate” to “market perform.” Bear Stearns maintains a “Buy” rating on EMC, but it has lowered its price target from $45 to the "low to mid-twenties," with analysts there saying they expect many more pre-announcements across the storage sector.

Credit Suisse First Boston has lowered estimates on Brocade (BRCD 19.19), Emulex (EMLX 11.49), McData (MCDT 11.10).

Meanwhile, EMC is looking to its new acquisition as part of the solution to its present woes. Based in Redwood City, California, Luminate is a privately held company specializing in software programs that track the status and performance of database applications from Oracle Corp. (Nasdaq: ORCL) and SAP Corp. (NYSE: SAP).