Midday Report: Nasdaq Gains on Tech Bounce

Gains in some heavily traded technology stocks sent the Nasdaq CompositeIndex slightly higher in early-afternoon trading Wednesday, while other major stockindexes headed lower.

The Nasdaq index was up 7.99 at 2,435.71 at midday, led by gains in Cisco(Nasdaq: CSCO), Applied Materials (Nasdaq: AMAT), Intel (Nasdaq: INTC) andOracle (Nasdaq: ORCL).

Applied Materials was up US$5.19 at $46.44 despite reports that the companypredicted the current quarter will be slow. The company, which makessemiconductor equipment, reported results for the first quarter just ended thatbeat analysts’ lowered expectations.

JP Morgan reportedly upgraded AppliedMaterials shares, saying the worst could be over for the company.

Microsoft (Nasdaq: MSFT) was down 12 cents at $58.31, following reports theU.S. Justice Department is reviewing the software giant’s investment inCorel. Microsoft also named a new president and chief operating officer,Rick Belluzzo.

JDS Uniphase (Nasdaq: JDSU) erased an early loss to trade up 17 cents at$38.67. The company, which makes fiber-optic components, lowered its salesand earnings projections for the quarter ending March 31st. Analysts atAdams Harkness and JD Cowen reportedly lowered their ratings on JDS Uniphaseshares following the news.

Dow, S&P Lower

The Dow Jones Industrial Average and Standard & Poor’s 500 index were lowerat midday, as non-technology companies weighed in with earnings warnings.Agribusiness giant ConAgra (NYSE: CAG) said its results would be belowearlier forecasts, and grocery-store chain Whole Foods Market(Nasdaq: WFMI) reported results that missed expectations.

In economic news, the Commerce Department said business inventories rosejust 0.1 percent in December, reportedly the smallest gain since January1999, and a sign companies were cutting back on stockpiles as demand forproducts slowed.

Greenspan’s View

On Tuesday, Federal Reserve chairman Alan Greenspan said thethere were “downside risks” to the economy, though “the degree ofretrenchment will presumably be limited.”

“Prospects for high productivity growth should, with time, bolster bothconsumption and investment demand,” Greenspan told the House BankingCommittee. “Before long in this scenario, excess inventories would be runoff to desired levels.”

The E-Commerce TimesIndex was up 0.59 percent at midday. Amazon.com (Nasdaq: AMZN), Webvan(Nasdaq: WBVN) and eBay (Nasdaq: EBAY) were higher, while Priceline.com(Nasdaq: PCLN), Barnesandnoble.com (Nasdaq: BNBN) and Egghead (Nasdaq: EGGS) were lower.

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