Midday Report: Nasdaq Decline Persists as Techs Skid

Technology stocks once again led the Nasdaq Composite Index lower in midday trading Tuesday, asinvestors sought refuge in retail and other sectors.

Analyst downgradescontinued to pummel a number of issues. At midday, the Nasdaq was down 57.58 at 2,367.80.

Cisco Systems(Nasdaq: CSCO), down US$1.69 at $26.56, and JDS Uniphase (Nasdaq: JDSU), down$3.56 at $32.25, were among the most active issues.

Additionally, Sun Microsystems (Nasdaq: SUNW), down 44 cents at $22.75and Intel (Nasdaq: INTC), down $1.88 at $32.50, also brought the Nasdaq lower.

JDS Uniphase was downgraded to neutral from strong buy at US Bancorp PiperJaffray. The firm said an “inventory overhang” could continue to pressureresults through September, and cut its 12-month price target for the stockto $43 from $65.

Applied Micro Circuits (Nasdaq: AMCC) and PMC Sierra (Nasdaq: PMCS) werealso lower on reported downgrades at Credit Suisse First Boston.

Downgrades Sink Nortel

On the New York Stock Exchange, Nortel Networks (NYSE: NT) was down$1.05 at $18.95 following reports of downgrades at Adams Harkness and Credit Suisse First Boston.

On Friday, Nortel helped lead technology stocks lowerwhen it said that a “faster and more severe economic downturn” than expectedwould slow growth this year.

E-Commerce Stocks Drop

The E-Commerce TimesIndex of 10 prominent e-commerce players was down 2.24 percent atmidday, led by declines in Amazon.com (Nasdaq: AMZN) and Barnesandnoble.com(Nasdaq: BNBN).

Webvan (Nasdaq: WBVN) was up 3 cents at 34 cents — a gain of almost 10percent — after the online grocery company said it would end service in Dallas,Texas, letting go 220 workers as a result. The company said it wanted toconserve cash and focus on bringing its other regional operations toprofitability.

Breakaway Gain

Breakaway Solutions (Nasdaq: BWAY) also had some good news for investors.Breakaway was up 6 cents at $1.19 after the company, which provides Internetand software consulting services, said SCP Private Equity Partners andInternet Capital Group will provide $33 million in financing, helping thecompany keep its operations going while it pushes for profitability.

FairMarkets (Nasdaq: FAIM) was up 41 cents at $2.28 after announcingthat its clients would be able to list their wares directly over the eBayonline auction system.