MIDDAY MARKETS: Communications chip stocks thump Nasdaq

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Downgrades for Broadcom and other communications chip makers dragged the Nasdaq down at midday Thursday. The Nasdaq tumbled 27.41 to 3138.08 and the Dow Jones industrial average shed 18.20 to 10,689.40.

The Inter@ctive Week @Net Index fell 5 to 399.82.

Reaction to the Consumer Price Index (CPI) was neutral; the Labor Department reported retail prices increased 0.2 percent in October, in line with consensus forecasts.

Broadcom (Nasdaq: BRCM) and other makers of communications semiconductors fell sharply Thursday after downgrades from Merrill Lynch. Broadcom, down 16.69 to 153, Applied Micro Circuits Corp. (Nasdaq: AMCC), down 5.81 to 65.19, PMC-Sierra (Nasdaq: PMCS), down 13.38 to 117.75, Transwitch Corp. (Nasdaq: TXCC), down 4.28 to 40.88, and Vitesse (Nasdaq: VTSS), down 3 to 67.6875 were all downgraded to near-term "accumulate" from "buy" by analyst Merrill Joseph Osha.

Despite topping analyst estimates for its fourth quarter, Applied Materials (Nasdaq: AMAT), down 0.5 to 42.25, received lukewarm ratings.

Xilinx, Inc. (Nasdaq: XLNX), said Thursday it would consolidate its outstanding equity through a repurchase of up to $250 million of its common stock.

Xpedior Inc. (Nasdaq: XPDR), up 0.63 to 1.72, said Thursday it has expanded its software alliance relationship with IBM (NYSE: IBM), down 0.19 to 99.19, and will develop products for IBM's Websphere platform.

MP3.com Inc. (Nasdaq: MPPP), up 0.91 to 7.09, can't go a day without a lawsuit. Just when the online music provider appeared to be in the clear, it got whacked with another lawsuit Thursday.

Shares of Novatel Wireless Inc. (Nasdaq: NVTL), a provider of wireless data modems and software for handheld devices, were priced at $8 per share, below its estimated price range for trading Thursday.

Amazon (Nasdaq: AMZN) rose 0.81 to 30.31, AOL (NYSE: AOL) gained 0.42 to 49.86 and Yahoo! (Nasdaq: YHOO) fell 0.94 to 56.19.

Among other leading tech issues: Cisco (Nasdaq: CSCO)dropped 0.81 to 52.75, Intel (Nasdaq: INTC) rose 0.88 to 42.38, Microsoft (Nasdaq: MSFT) was up 0.81 to 70.88, and Oracle (Nasdaq: ORCL) gained 0.56 to 29.44.