Midday Report: Cisco Drags Techs, Nasdaq Lower

A report by Cisco Systems (Nasdaq: CSCO) of a big quarterly loss fueled fears of a weakening economy, sending technology stocks lower on Wednesday.

Blue chips, meanwhile, erased morning losses and were higher at midday.

The Nasdaq Composite Index was down 23.57 in midday trading at 2,175.20. Cisco was the most active stock on the index, falling US$1.08 to $19.30 after reporting a $2.69 billion loss for the fourth quarter ended in April.

The networking giant said a slow economy caused customers to cut back on spending, resulting in a drop in revenue for the quarter. Charges for layoffs and other cost cuts also hurt the company’s bottom line.

Cisco Fallout

Though the loss was expected — Cisco had warned that the quarter would be tough — the report helped send shares of other networking companies lower. Juniper Networks (Nasdaq: JNPR) was down 50 cents at $58.40, and JDS Uniphase (Nasdaq: JDSU) was down 19 cents at $22.80.

Microsoft (Nasdaq: MSFT) was down $1.04 at $71.02, following reports that the company will launch its Windows XP operating system in October, later than some had expected.

Other Nasdaq losers included 3Com (Nasdaq: COMS), down 29 cents at $5.88 after reportedly widening its range for the current quarter’s results, and WebMD (Nasdaq: HLTH), down 60 cents at $8.45 despite reporting a narrower quarterly loss and announcing a deal with America Online (NYSE: AOL).

GE Sees Record Year

The Standard & Poor’s 500 stock index was down 3.13 to 1,258.07 at midday. The Dow Jones Industrial Average, however, shook off an early loss to trade up 8.00 at 10,891.51, after General Electric (NYSE: GE) said it is on track for “record” earnings this year, even as the overall economy languishes.

National Semiconductor (Nasdaq: NSM) erased an early loss and was trading up 75 cents at $25.75, even after lowering its outlook for the fourth quarter ending May 27th and announcing plans to cut jobs amid a drop in demand for its products.

E-Commerce Ticks Higher

The E-Commerce Times Index of 15 prominent dot-coms was up 0.3 percent at midday. Autobytel (Nasdaq: ABTL) was up 22 cents at $1.49, Travelocity (Nasdaq: TVLY) was up $1.06 at $30.75, and Stamps.com (Nasdaq: STMP) was ahead 4 cents at $3.04.

Outpost.com (Nasdaq: COOL), meanwhile, was down 3 cents at 75 cents after reinstating its free shipping policy on purchases of $500 or more.