Midday Report: Nasdaq Lower as Tech Skid Continues

The steady stream of downbeat forecasts from technology companies continuedThursday, driving the Nasdaq Composite Index down 3.70 at 2,265.24 at midday.On Wednesday, the index closed at a two-year low.

Leading Thursday’s decline was Brocade Systems (Nasdaq: BRCD), which reacheda 52-week low in the morning following reports that the maker of networkingequipment expects a soft second quarter. At midday, Brocade was down US$4.07 at $40.62.

The drop came even as Brocade’s first-quarter earnings beat analyst estimates by a penny. Analysts at Morgan Stanley Dean Witter and Bank ofAmerica Securities reportedly downgraded Brocade.

Veritas Software (Nasdaq: VRTS) was also lower, falling $7.76 to $64.62 bymidday.

Cisco, Sun Gain

Among Nasdaq gainers, Cisco Systems (Nasdaq: CSCO) picked up $1.50 to$26.62 and Sun Microsystems (Nasdaq: SUNW) gained $1.32 to $20.94.

Another gainer was JDS Uniphase (Nasdaq: JDSU), which rose 56 cents to $32.25.

Internet Capital (Nasdaq: ICGE) was down 9 cents at $3.34 after theInternet incubator reported a wider loss for the fourth quarter endedDecember 31st. However, the company said it has reduced cash burn, andexpects to end the year with cash, short-term investments andavailable-for-sale securities of more than $200 million.

Efficient Rises on Buyout

One tech issue — digital subscriber line provider Efficient Networks(Nasdaq: EFNT) — managed to gain $10.75 to $23.12 by midday, after the announcement that a division of Siemens agreed to buy the company for $32.50 per share, or a total of $1.5 billion.

On the New York Stock Exchange, EMC (NYSE: EMC) was $3.54 lower at $39.41, amid reports that the data-storage company expects weak results.

E-Commerce Issues Sink

All 10 issues in the E-Commerce Times Index were lower, with the index registering a 3.49percent decline at midday.

eBay (Nasdaq: EBAY) was down $2.19 at $43.50, reversing a morning gain. Theonline auctioneer said it will buy iBazar of France in an all-stock deal estimated to be worth up to $112 million.

Webvan Group (Nasdaq: WBVN) was down 3 cents at 31 cents. Earlier this week,the online grocer said it would end service in Dallas, Texas, as it focuseson bringing its other regions to profitability.

Peapod a Bright Spot

Webvan’s Internet grocery rival, Peapod (Nasdaq: PPOD), bucked the e-commerce trend, rising 6 cents to$1.06 after reporting higher sales for the fourth quarter ended December31st. Peapod also predicted a smaller loss than previously thought for the currentyear.

However, despite the good results, Peapod warned that it would run out of cash if it does not get additional financing soon.

In economic news, the U.S. Department of Labor said new claims for unemploymentbenefits rose by 4,000 last week to 348,000, showing companies continue tolay off workers.

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