Technology stocks staged a modest advance in late afternoon trading yesterday as investors scooped up software and telecom names, but the rally was capped by a sharp decline in the shares of Web gear giant Cisco Systems.

The Cisco sell-off followed comments from chief executive Mr John Chambers, who told a technology conference in Scottsdale, Arizona, that the current quarter was "a little bit more challenging" than expected six weeks ago due to a slowdown in capital spending.

Wall Street was bracing itself for financial results to be issued by two top-tier technology companies, mobile phone giant Motorola and Web media company Yahoo!, expected after the closing bell yesterday.