Midday Report: Nasdaq, Tech Stocks Skid on Profit Fears

U.S. technology stocks traded mostly lower at midday Friday, with a warningfrom chipmaker National Semiconductor Corp. (NYSE: NSM) about quarterlyresults dragging the sector down.

National Semiconductor, which was down US$1.61 at $25.70 in early afternoontrading, said sales for the third quarter ending February 25th may be belowsecond-quarter levels, due in part to lower orders from computer andwireless-phone manufacturers.

Another warning came from Silicon Storage Technology, Inc. (Nasdaq: SSTI),which was down 88 cents at $13.69 at midday. The company, which makes components forpersonal computers, reported lower-than-expected results for the fourthquarter ended December 31st and said results for the current quarter wouldlikely be hurt as well as the industry slump continues.

Techs Sink Nasdaq

The tech-heavy Nasdaq Composite Index was down 68.72 at 2,714.07, led bydeclines in Dell Computer Corp. (Nasdaq: DELL), Cisco Systems, Inc. (Nasdaq:CSCO) and Intel Corp. (Nasdaq: INTC).

The Dow Jones Industrial Average of 30 stocks also suffered,reversing an early advance to trade down 60.38 at 10,923.25 by midday.

Dell (Nasdaq: DELL) was down 6 cents at $25.88. The stock rose early in thesession after the company’s chief executive reportedly said results forthe latest fiscal year will not be as weak as previously thought, due to strong demand for the company’s servers.

AOL at Attention

AOL Time Warner (NYSE: AOL) was the most active issue on the New York StockExchange, down $1.99 at $48.74 following reports that analysts at LehmanBrothers and Goldman Sachs foresee little appreciation for the stock over thenear term.

However, analysts at Merrill Lynch reportedly lowered their riskrating for the newly merged company to above average from high.

Meanwhile, the economy continued to send up signals that it is slowing considerably. The Labor Department reported that the U.S. unemployment rate rose to 4.2 percent in January, while at the same time,companies added 268,000 jobs.

E-Commerce Issues Fall

The dot-com sector is still feeling the pinch of an ongoing shakeout, with the E-Commerce Times Stock Index of10 prominent e-tailers down 4.33 percent at midday.

Both Amazon.com(Nasdaq: AMZN) and its chief rival Barnesandnoble.com (Nasdaq: BNBN) were lower, while Internet delivery service Webvan Group (Nasdaq: WBVN) was the only stock in the index to register a gain.

Barnesandnoble.com fell after the company, which had been scheduled toreport quarterly results Thursday, delayed its report until next week,reportedly because it needs more time to audit the results.

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