Warnings from Motorola and Sun Microsystems led the Nasdaq lower at midday Friday. The Nasdaq slid 58.58 points to 2,186.38, and the Dow Jones industrial average was off 157.69 points to 10,369.12.
The Inter@ctive Week @Net Index fell 3 points to 286.81.
"Poor earnings results are dominating the enhanced liquidity provided by the Fed, which is leading us back to a 2,250 Nasdaq," said JP Morgan analyst Edward F. Snyder earlier this morning, before the tech-heavy index slipped even lower.
Synder said that average earnings expectations for the Nasdaq for the second half of this year, which were expected to be up 7 percent and 17 percent in the third and fourth quarters, respectively, are obviously now "too high, and the visibility of achieving them too low."
Increasing pessimism came on the backs of profit warnings from two major companies.
Wireless communications equipment maker Motorola (NYSE: MOT), off 74 cents a share to $16.55, said it would not meet its first-quarter sales and earnings estimates--and may report a loss--because of a significant slowdown in orders across all of its business lines.
Sun Microsystems (Nasdaq: SUNW) held up to analyst and investor scrutiny Friday. It was off only 5 cents a share, or 3 percent to $20.30, on the kind of profit warning that has halved some companies' stocks.
Shares of Qualcomm (Nasdaq: QCOM) fell Friday after a downgrade and a report that its latest wireless technology would be delayed in hitting European markets.
BEA Systems was also down, despite a positive quarterly report. Shares fell as Wall Street squabbled over a bullish round of analyst reports and BEA's shortfall of its "whisper" sales target.
VerticalNet (Nasdaq: VERT) shares were off 56 cents a share to $2.96; after the business-to-business company came off a topsy-turvy year, analysts are trying to figure out if it can get its new software division up and running fast enough to offset sluggish marketplace sales.
On the deal-making front, Intel (Nasdaq: INTC), down 25 cents a share to $29.75, and Network Appliance (Nasdaq: NTAP), off $1.25 to $32.56, said they signed a technology and business deal worth $1 billion over seven years.
Most tech bellwethers were also in decline. Cisco (Nasdaq: CSCO) fell 62 cents a share to $25.81, Oracle (Nasdaq: ORCL) shed $1.69 to $21.69 and Microsoft (Nasdaq: MSFT) rose $1 to $56.19.
Telecommunications equipment maker Lucent Technologies (NYSE: LU),which is battling massive losses, was off 2 cents a share to $12.33 even after it announced it has secured $6.5 billion in new financing.
Leading Internet companies were also on a downswing. Amazon (Nasdaq: AMZN) fell 5 cents a share to $11.44, America Online (NYSE: AOL) dropped $2.10 to $42.80 and Yahoo (Nasdaq: YHOO) lost 63 cents a share to $23.38.
ZDII staff and Reuters contributed to this roundup.