Goldman Sachs cut its earnings estimates for Microsoft (MSFT

) and Siebel Systems (SEBL

).

Analyst Rick Sherlund says that despite overall strong macro data, a recovery in the technology sector is lagging well behind the overall U.S. economy. To reflect the slower pace of recovery, he cut Siebel's EPS estimates from $0.57 to $0.50 for 2002 and from $0.75 to $0.65 for 2003.

For Microsoft, Sherlund cut his $2.05 fiscal year 2003 (June) EPS estimate to $1.95, and maintained his $1.88 fiscal year 2002 forecast. He bases Microsoft's new fiscal year 2003 estimate on an expected slower ramp-up in capital spending by IT departments, and the expectation that marketing costs and R&D will accelerate as strategic initiatives are funded by Microsoft's management.

Despite the lower estimates, Sherlund is keeping both stocks on Goldman's recommended list.