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Stocks move lower in early afternoon trading

By Joshua Freed, Associated Press

Technology stocks led the market lower on Wednesday after a disappointing earnings report from Oracle Corp.

Uncertainty over whether Washington will extend a tax cut and surprisingly large loans by the European Central Bank to boost the region's banks also gave investors reasons to sell stocks, a day after the Dow Jones industrial average had its biggest gain this month.

The Nasdaq composite fell 52 points, or 2 percent, to 2,551 at midday. The Nasdaq index is heavily weighted toward technology companies, so Oracle's decline had a big impact.

Broader market indicators fell less. The Dow lost 83 points, or 0.7 percent, to 12,020. IBM Corp. fell 3.4 percent, the biggest decliner among the Dow's 30 stocks. On Tuesday the Dow jumped 337 on good economic news from Europe and a surge in new home construction in the U.S.

The Standard & Poor's 500 index slipped 9.5 points, or 0.8 percent, to 1,231.

Oracle plunged almost 14 percent after the business software company said it was struggling to close deals. The results seemed to reinforce worries that businesses and the government may cut back on technology spending. Especially worrying was a weak 2 percent gain in new software licenses, a key sign of demand from other businesses. Oracle had predicted gains of as much as 16 percent.

Eight of the S&P 500's 10 industry sectors fell or were flat, led by a 2.5 percent drop in technology companies. The only two rising sectors were utilities and consumer staples, which investors consider to be safe havens since they pay fat dividends and tend to hold up better when the economy is slow.

Walgreen Co. slipped 3.3 percent after initially dropping more than 7 percent. The drugstore chain said quarterly profits fell more than 4 percent after a slow year for flu shots. Walgreen said it made no progress in staying with a pharmacy network that provides $5.3 billion of its annual revenue. Walgreen says filling those prescriptions is unprofitable.

Nike Inc. shares rose 3 percent after reporting strong demand and higher prices for its shoes and clothing.

European markets gave up early gains. The British FTSE 100 index fell 0.6 percent and Germany's DAX fell 0.9 percent. New data showed extensive lending from the European Central Bank to European banks. Early optimism that the bank was willing to lend so much gave way to worries that it needed to lend so much, and that it was only treating the symptoms of the debt crisis.

Oil prices rose more than 1 percent to $98.45 per barrel in Nymex trading.