MIDDAY MARKETS: Microsoft dents techs

Lackluster Microsoft earnings tilted the Nasdaq down at midday Wednesday. The Nasdaq shed 86.91 to 4,090.26 and the Dow Jones industrial average climbed 22.28 to 10,792.02.

The Inter@ctive Week @Net Index fell 7 to 481.36.

Investors didn't have a favorable reaction to Microsoft's (Nasdaq: MSFT) earnings; the software giant fell 5 to 73 1/2 after announcing it beat forecasts of 42 cents a share, but revenue remained flat. Other steep decliners included Commerce One (Nasdaq: CMRC), down 7 11/16 to 58 7/8, Veritas (Nasdaq: VRTS) and Foundry (Nasdaq: FDRY), down 20 5/16 to 103 13/16,

In economic news, the trade deficit widened to a record $31.04 billion in May, lifted by American strong demand for overseas goods. The trade deficit widened too, the Commerce Department said. A surge in the price of crude oil was a big factor behind the gains.

Investors are awaiting Federal Reserve Chairman Alan Greenspan's testimony before the Senate Banking Committee Thursday for clues to what the Fed will do with interest rates next.

Data storage giant EMC Corp. (NYSE: EMC), up 4 3/16 to 82 3/4, beat Wall Street's consensus estimates Wednesday with second quarter earnings of $429 million, or 19 cents a share, on sales of $2.15 billion.

E*Trade Group, Inc. (Nasdaq: EGRP), up 3/4 to 18 11/16, said Tuesday it had net income of $5.7 million, or 2 cents a share, for its third quarter, and a break-even amount per share from ongoing operations. Knight Trimark (Nasdaq: NITE), down 1 3/16 to 30 15/16, also reported quarterly results Wednesday.

Tellabs Inc. (Nasdaq: TLAB) announced Wednesday that earnings for its second quarter were 39 cents a share, topping First Call's consensus estimate of 37 cents a share

Support.com (Nasdaq: SPRT), a provider of web-based software that offers self-service IT support, priced its offering of 4.25 million shares at $14 each Wednesday.

CNET Networks (Nasdaq: CNET) said Wednesday it would buy Ziff-Davis Inc.'s online business ZDNet (NYSE: ZDZ) for $1.6 billion in stock. ZDII is part of ZDNet.

Yahoo! (Nasdaq: YHOO) rose 3 3/16 to 133 1/8, Amazon (Nasdaq: AMZN) rose 11/16 to 41 1/16 and AOL (NYSE: AOL) lost 1 1/8 to 59 5/8.

Intel (Nasdaq: INTC) rose 3/8 to 143 3/8 and Microsoft (Nasdaq: MSFT) lost 4 1/4 to 74.

Among other leading tech issues: Cisco (Nasdaq: CSCO) fell 3/16 to 67 1/16, Sun Microsystems (Nasdaq: SUNW) fell 1 13/16 to 93 1/2 and Oracle (Nasdaq: ORCL) rose 3 5/8 to 83 1/8.