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MIDDAY MARKETS: Cisco drags techs down

Cisco's statement about inventory was causing carnage among communications systems at midday Tuesday. The Nasdaq was off 2.42 to 3,413.79 and the Dow Jones industrial average shed 14.79 to 10,962.42.

The Inter@ctive Week @Net Index fell 3 to 455.45.

Cisco Systems (Nasdaq: CSCO) gained 0.88 to 56 after a shaky start following its first-quarter report. The company’s statements about inventory levels caused a ripple of analyst actions and falling communications chip stocks. PMC-Sierra (Nasdaq: PMCS) dropped 24.13 to 129.69, Broadcom (Nasdaq: BRCM) lost 29.88 to 189.1, Altera (Nasdaq: ALTR) shed 3.69 to 29.63 and Xilinx (Nasdaq: XLNX) was down 5.69 to 67.19.

Competitors JDS Uniphase (Nasdaq: JDSU), down 3.75 to 73.69, and Juniper (Nasdaq: JNPR), down 2.18 to 216.63, were also affected by the news. Transmeta Corp. (Nasdaq: TMTA) priced 13 million shares at $21, $3 above its range of $16 to $18, a sign that demand is strong despite news that Compaq Computer Corp. (NYSE: CPQ) is the latest large computer manufacturer to pass over Transmeta Corp.'s Crusoe processor. News of IBM's (NYSE: IBM) decision to abandon Crusoe came out last week.

Vertel (Nasdaq: VRTL) shares were up 40 percent at midday, climbing 1.63 to 5.69, after the company announced it has sold licenses of its products to two companies in China.

VerticalNet (Nasdaq: VERT) said it will buy SierraCities (Nasdaq: BTOB) for $133 million in stock. Separately, SierraCities released its third quarter results, falling short of analyst estimates with earning of 1 cent per share. VerticalNet is down 0.19 to 29.31 while SierraCities is trading up 1.69 to 5.93 at midday.

Level 3 Communications (Nasdaq: LVLT) said Tuesday it is comfortable with previously raised estimates, and plans to revise its 2001 revenue projection. Shares were trading up 2.44 to 37.44.

ECI Telecom Ltd. (Nasdaq: ECIL), up 0.31 to 24.19, met analyst estimates Tuesday posting 15 percent revenue growth compared to the same period last year. Amazon (Nasdaq: AMZN) rose 1.50 to 38.06, AOL (NYSE: AOL) gained 0.46 to 56.32 and Yahoo! (Nasdaq: YHOO) was up 2.88 to 68.5.

Among other leading tech issues: Intel (Nasdaq: INTC) fell 0.50 to 46.06, Microsoft (Nasdaq: MSFT) gained 2.19 to 71.69, and Oracle (Nasdaq: ORCL) shed 0.25 to 27.69.