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MIDDAY MARKETS: Nasdaq loses steam

Technology stocks backed off their gains at midday Monday as a few companies delivered bad financial news that overpowered last week's enthusiasm.

The Nasdaq fell 14.20 points to 2,177.33, and the Dow Jones industrial average slipped 57.58 points to 10,893.66.

The Nasdaq gave up its rally despite support from the most actively traded stock, Cisco Systems (Nasdaq: CSCO), which was up 46 cents to $20.10 ahead of its third-quarter results due out tomorrow. Shares on the Nasdaq had risen Friday despite a worse-than-expected employment report, as investors held out hopes that the Federal Reserve would cut interest rates again.

With no economic reports to mull Monday, a few troubled technology companies brought the Nasdaq back into the red.

Portal Software (Nasdaq: PRSF), down $3.03 to $6.25, became the latest to announce bad news. It will miss first-quarter earnings and revenue estimates by a wide margin, and will lay off staff, shut facilities and write off assets in an attempt to cut costs.

Networking equipment maker 3Com (Nasdaq: COMS) said it would cut its work force by 3,000 people, or 30 percent, in an effort to trim its costs by $1 billion. Shares rose 8 cents to $6.98.

Transmeta (Nasdaq: TMTA), down $3.54 to $11.03, fell when more than 113 million shares flooded the market to be sold as the chipmaker's initial public offering "lockup" period expired.

On the merger front, Proxicom received a rival bid from a little-known South African company just as it was revving up for its merger with Compaq. Shares bounded up $1.66 to $7.32 though analysts said Proxicom may have a tough decision because Compaq isn't likely to enter a bidding war.

Amazon (Nasdaq: AMZN) was off 28 cents to $17.28, AOL Time Warner (NYSE: AOL) lost 62 cents to $51.58 and Yahoo (Nasdaq: YHOO) shed 22 cents to $19.91.

Intel (Nasdaq: INTC) gained 11 cents to $30.99, Microsoft (Nasdaq: MSFT) jumped 77 cents to $71.52 and Oracle (Nasdaq: ORCL) was off 19 cents to $16.90.

ZDII staff and Reuters contributed to this roundup.