Midday Report: Nasdaq, Techs Regain Momentum

Technology stocks were in the midst of a rebound at midday Tuesday, as investors returned to thebattered sector in the absence of fresh economic news.

The Nasdaq Composite Index was up 55.87 at 2,699.08 in early-afternoontrading. Cisco Systems (Nasdaq: CSCO), scheduled to report quarterly resultsafter the close of trading, helped lead the advance, rising US$1.31 to $35.88.

Microsoft (Nasdaq: MSFT) was also a big gainer, rising $1.12 to$63.06.

JDS Uniphase (Nasdaq: JDSU) was up $2.77 at $52.77 following reports that the fiber-optics company received U.S. government clearance to acquire SDL, Inc. (Nasdaq: SDLI) for $17.6 billion. Likewise, SDL was up $14.94 at $200.31.

Techs Lead Dow Advance

Tech stocks also helped lead blue chips higher, with Hewlett-Packard(NYSE: HWP) and IBM (NYSE: IBM) leading the Dow Jones Industrial Average up50.93 to 11,016.78 by midday.

Chip stocks were also mostly higher, rebounding from a Monday fall that was sparkedby an industry report showing a drop in sales. Texas Instruments (NYSE: TXU) was up 40 cents at $39.20, and Motorola (NYSE: MOT) was up 67 cents at $21.08.

Sun Microsystems (Nasdaq: SUNW), which announced a number of new agreements Tuesday, sawits shares rise $1.12 to $29.

E-Commerce Mixed

E-commerce stocks were mixed at midday, with the E-Commerce Times Index up 2.04 percent. Gains in Webvan Group (Nasdaq: WBVN), Travelocity (Nasdaq: TVLY) and Priceline.com (Nasdaq: PCLN) offset some big drops in other issues.

eToys (Nasdaq: ETYS) was down 12 cents at 16 cents after the once high flying e-tailer said it would let go its remaining employees and shut down its operations by April. The company, which says it will run outof cash at the end of March, said it is continuing to work with itsfinancial adviser on ways to raise money, although prospects are slim.

Web merchant Buy.com (Nasdaq: BUYX) was up 3 cents at 69 cents in midday trading, following news that the company soldits UK division to John Lewis Partnership, a British retailer.

Amazon Angst

Amazon.com (Nasdaq: AMZN) reversed an early drop, trading up 12 centsat $14.56 by midday. A Lehman Brothers bond analyst suggested investors avoid the company’s convertible bonds because of a potential “creditorsqueeze” later this year.

According to analyst Ravi Suria, Amazon’s working capital has been declining since a debt offeringin the first quarter of 2000, and is likely to “dip into negative territory”this year without an additional infusion.

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