MIDDAY MARKETS: Cisco hammers techs

Cisco Systems took a chunk out of the Nasdaq at midday Wednesday as competitors and suppliers felt the bite of its second-quarter report. The Nasdaq slid 45.10 points to 2619.39, and the Dow Jones industrial average was up 8.37 points to 10,965.79.

The Inter@ctive Week @Net Index fell 11 points to 278.92.

Shares of Cisco Systems (Nasdaq: CSCO) took a hit in early trading Wednesday, falling $4.25, or 12 percent, to $31.5, as Wall Street analysts downgraded the stock and cut estimates based on the company's outlook for the next two quarters. Even amid the downgrades, however, many analysts reiterated that Cisco remained a good long-term bet.

Just a few among the many companies feeling the ripple effect from Cisco's report are Lucent (NYSE: LU), down $0.84 to $17.02, Nortel (NYSE: NT), off $1.3 to $34.21, Sun Microsystems (Nasdaq: SUNW), off $1.19 to $26.63, Juniper Networks (Nasdaq: JNPR), down $6.31 to $95.88, Ciena (Nasdaq: CIEN), off $2.75 to $79.94 and Sycamore Networks (Nasdaq: SCMR), down $1.69 to $25.31.

The Labor Department reported that U.S. non-farm productivity rose by 2.4 percent in the fourth quarter compared with a revised 3.0 percent gain in the prior quarter, which is slightly more than analysts had expected.

Wireless-data products and services provider Aether Systems (Nasdaq: AETH), down $2.22 to $41.41, said it now expects to see positive cash earnings in the third quarter of 2002, two quarters earlier than it had previously thought, helped by growing revenue.

Digital Island (Nasdaq: ISLD), up $0.63 to $5.37, gained Wednesday after the company was granted a patent covering its Internet content delivery.

Intel (Nasdaq: INTC) was off $0.44 to $35, Oracle (Nasdaq: ORCL) fell $0.63 to $27 and Microsoft (Nasdaq: MSFT) rose $0.81 to $63.38.

Amazon (Nasdaq: AMZN) fell $0.88 to $14.94, AOL (NYSE: AOL) rose $0.31 to $49 and Yahoo (Nasdaq: YHOO) fell $2.38 to $34.