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Separately, the fiber optic equipment maker Corning said it would make optical equipment incorporating Cisco gear based on an Internet protocol that breaks data into packets for transmission.
The boxes house electronic and fiber optic equipment for Time Warner Cable.
The maker of fiber optic equipment parts cited slowing demand for telecommunications gear.
Worries about Cisco spilled over into shares of fiber optic equipment makers.
The Ciena Corporation, the nation's second-largest maker of fiber optic equipment, reached its first supply agreement with AT&T.
In addition, sales of voice switches and fiber optic equipment were not as robust the company had hoped.
Another fiber optic equipment maker, Corning, rose $5.88, to $75.88, and other major technology names also bounced back.
Major customers for Nortel's switches and fiber optic equipment came under financial strain and slowed their purchases.
In September, Nortel announced plans to sell a business unit that makes Internet-related and fiber optic equipment.
JDS Uniphase, the largest component manufacturer for fiber optic equipment, said today that Kevin Kalkhoven had retired as co-chairman and chief executive.
The big fiber optic equipment maker JDS Uniphase lowered revenue estimates for the current quarter, citing the continuing slump in spending by communications companies.
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