MIDDAY MARKETS: Emulex drags down storage stocks

The Nasdaq was treading water at midday Monday while Emulex and a batch of storage-network stocks plunged. The Nasdaq rose 8.34 to 2,479.31 and the Dow Jones industrial average was up 103.051 to 10,884.50.

The Inter@ctive Week @Net Index fell 3 points to 286.81.

Shares of Emulex (Nasdaq: EMLX) fell $37.38 to $40.13, more than 36 percent Monday after the company said revenue growth for its third quarter could come in sequentially flat due to order delays. The company was also downgraded at USB Piper Jaffray.

The news had a ripple effect across fibre-channel and storage-network stocks on fears of deterioration in storage and server spending. Shares of Qlogic (Nasdaq: QLGC) were off $17.25 to $53.13, Brocade (Nasdaq: BRCD) was down $12 to $62.13 and Veritas (Nasdaq: VRTS) fell $7.75 to $70.38.

Liberate Technologies (Nasdaq: LBRT) slumped $1.69 to $12.62 after a downgrade and research that suggests delays in deploying interactive TV will fall hardest on the set-top box software maker.

Ten days after trading was halted by the Nasdaq, Critical Path (Nasdaq: CPTH) still isn't on the road to recovery. Trading was still halted on the stock and things looked even worse with reports that CEO Doug Hickey has departed.

Cisco (Nasdaq: CSCO) gained $0.69 to $28.88, Intel (Nasdaq: INTC) was up $1.31 to $34.81, Oracle (Nasdaq: ORCL) fell $0.06 to $23.5 and Microsoft (Nasdaq: MSFT) fell $0.31 to $58.81.

Amazon (Nasdaq: AMZN) rose $1.38 to $14.75, AOL (NYSE: AOL) increased $0.15 to $47.4 and Yahoo! (Nasdaq: YHOO) gained $1.44 to $29.37.