Beaten-down technology stocks failed to sustain an early rally Wednesday,and the Nasdaq Composite Index turned lower at midday despite solid gains for Cisco (Nasdaq: CSCO), Sun Microsystems (Nasdaq: SUNW) and Intel (Nasdaq: INTC).
The tech-heavy Nasdaq benchmark was down 7.58 at 1,849.86 in early-afternoontrading, as investors appeared unsatisfied with the Federal Reserve’s half percentage-pointrate cut delivered Tuesday. Many had hoped for a bigger cut.
The day’s economic news — a U.S. Department of Labor report showing a 0.3 percentrise in consumer prices last month — signals that inflation is not a likelythreat to the economy. Still, the rise in consumer prices was reportedly bigger than the 0.2 percent gain expected by analysts.
Blue-chip stocks were also lower at midday, with the Dow Jones IndustrialAverage down 95.22 at 9,625.54. The Standard & Poor’s 500 stock index wasdown 3.13 at 1,139.49.
Microsoft (Nasdaq: MSFT), down US$1.75 at $50.94, and drug company Amgen(Nasdaq: AMGN), down $5.94 at $55.38, led the Nasdaq’s decline.
3Com (Nasdaq: COMS) recovered from an early loss, and was trading up 6 cents at $6.28, even after reporting a loss for thethird quarter ended March 2nd and announcing more layoffs.
Thenetworking equipment maker also said it will take steps to cut costs in itsbroadband modem division and stop making consumer Internet appliances as itattempts to deal with a slumping telecom industry.
E-commerce stocks were mixed at midday. The E-Commerce Times Index was up 0.11percent, with gains in eBay (Nasdaq: EBAY) and Travelocity (Nasdaq: TVLY)offsetting losses in Barnesandnoble.com (Nasdaq: BNBN), Cyberian Outpost(Nasdaq: COOL) and Drugstore.com (Nasdaq: DSCM).
Amazon, unchanged at $10.25, shrugged off news of a shareholderlawsuit. A Seattle, Washington, law firm filed the suit, saying that it seeks to represent investors who purchased Amazon stock between February 2000 and March 2001. The complaint alleges that Amazon unlawfully inflated its stock price by communicating false and misleading information.
Meanwhile, Verisity (Nasdaq: VRST) wasreportedly up $2.06 at $9.06 in its first day of trading. The company, whichmakes testing software for electronic systems and components, sold 3.35million shares at $7 apiece. The price was said to be below the expectedrange of $8 to $10 per share.