Midday Report: Techs Deflate Nasdaq Rebound

The Nasdaq Composite Index tried and failed to stage a rebound Thursday, and by midday was trading down 0.34 at 1,853.79. Technology issues led the drop, as warnings about a slowing economy continued.

Sun Microsystems (Nasdaq: SUNW) and Intel Corp. (Nasdaq: INTC) led the decline. Sun was down 92 U.S. cents, or 5.8 percent, to $14.93, while Intel was down 25 cents to $26.69.

On the other hand, Cisco (Nasdaq: CSCO) recovered from a morning low of $15.38 and was up 13 cents at $15.88, and Oracle (Nasdaq: ORCL) bounced back from a low of $14.05 to reach $15.21, up 11 cents.

Blue chips were having a solid day. The Dow Jones Industrial Average was up 61.23 at 9,846.58, and the Standard & Poor’s 500 stock index was up 4.84 at 1,157.83.

E-commerce stocks were mixed, with the E-Commerce Times Index registering a 0.91 percent loss at midday. Gains in Webvan (Nasdaq: WBVN), PetSmart (Nasdaq: PETM) and Barnesandnoble.com (Nasdaq: BNBN) were offset by losses in Cyberian Outpost (Nasdaq: COOL), eBay (Nasdaq: EBAY) and Drugstore.com (Nasdaq: DSCM).

More Warnings

Novatel Wireless (Nasdaq: NVTL), Tech Data (Nasdaq: TECD), JNI (Nasdaq: JNIC) and SafeNet (Nasdaq: SFNT) all dropped after lowering their expectations for quarterly results.

Novatel, which provides wireless data communications services, fell $1.53 to $2.66 after saying that it will lose more money this quarter than previously thought, and that it will undertake a restructuring that includes eliminating 80 jobs.

SafeNet lost more than half its value in morning trading after saying that order cancellations and “reduced expectations” for businesses from networking customers would result in an earnings shortfall for the quarter ending March 31st. SafeNet makes technology designed at enabling secure communications over the Internet.

Mixed Messages

Tech Data (Nasdaq: TECD) shrugged off a warning about quarterly results, rising $2.12 to $28.44 as the company weighed in with results for the quarter ended January 31st that topped analyst expectations. services to Charter customers. Liberate said it will incur some $2 million in expenses this quarter as it gears up to deliver on its end of the deal.

Economy Slowed in Q4

In economic news, the U.S. Department of Commerce said that the U.S. economy grew at a 1 percent annual rate during the fourth quarter of last year, reportedly the weakest rise in 5 1/2 years. Lower spending by corporations and consumers contributed to the slowing economy.

The U.S. Department of Labor, meanwhile, said that the number of people filing new claims for unemployment insurance fell last week to the lowest total in a month, according to published reports.

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