NEW YORK (CNN/Money) - U.S. stocks eased off earlier lows but remained under pressure at midday Friday, after profit warnings from No. 1 chipmaker Intel and biotech developer Biogen seemed to exacerbate fears about the timeline of a corporate recovery.

The news overwhelmed any positive sentiment regarding a better-than-expected May labor report.

At 11:40 a.m. ET, the Nasdaq composite fell 32.22 to 1,522.66; it was down as much as 59 points earlier in the session. The Dow Jones industrial average lost 93.69 to 9,530.65, rebounding from being down as much as 152 points. The Standard & Poor's 500 gave back 7.64 to 1.021.23.

"It's pretty much as it has been. The market is nasty and negative. We're suffering from a parade of horribles and there isn't a near-term catalyst to turn it around," said Alan Ackerman, market strategist at Fahnestock & Co. "There is some significant lack of trust in the market. We're lacking leadership from Wall Street and Washington right now."

In its mid-quarter update late Thursday, Intel (INTC: down $4.94 to $22.06, Research, Estimates) said it now expects to see revenue of between $6.2 billion and $6.5 billion, below the previously given range of $6.4 billion to $7 billion. The company blamed weak European sales for the decline in revenue. Intel's gross profit margin will also miss; it is now expected to be around 49 percent, rather than the previous estimate of 53 percent.

Shares of Biogen (BGEN: down $5.80 to $41.90, Research, Estimates) also fell after the biotech developer said that earnings for its second quarter and for 2002 will miss estimates.

"The tech news exacerbates an already negative feeling," said Ackerman.

Troubled conglomerate Tyco International (TYC: down $4.31 to $10.29, Research, Estimates) continued to decline. The company said it is launching an internal investigation into the use of its funds by former CEO Dennis Kozlowski.

"In a word, I would describe the market action right now as 'Yuck,'" said Jon Burnham, portfolio manager at Burnham Securities. "We're in a bear market for the time being. Things are pretty bleak and people are overreacting to every little thing, but this will pass."

Investors continued to shrug off signs of improvement in the U.S. economy. The rate of unemployment declined to 5.8 percent in May from 6.0 percent in the previous month. Economists surveyed by Briefing.com were expecting a rise to 6.1 percent. Separately, employers added 41,000 new jobs last month, less than expected but the most since February 2001. The additions follow a revised 6,000 gain the previous month.

"The economy is holding up. We had good employment numbers this morning," Burnham said. "In the short term, I wouldn't be surprised to see a rally early next week."

Treasury prices fell, pushing the yield on the ten-year note up to 5.03 percent.

In global trade, European stock markets were broadly lower, while Asian markets fell on tech weakness. The dollar was weaker versus the euro and a little stronger versus the yen.

Light crude oil futures fell 2 cents to $24.77. The price of gold, often stronger when stocks are under pressure, rose 40 cents to $326.20 an ounce.

Market breadth was negative in active trading. On the New York Stock Exchange, losers topped winners 3-to-2 as 796 million shares changed hands. On the Nasdaq, decliners beat advancers by 2-to-1 as 968 million shares traded.

Further hurting chips was a pair of analyst downgrades. J.P. Morgan cut its rating on Intel, Advanced Micro Devices (AMD: down $1.21 to $9.40, Research, Estimates) and nVidia (NVDA: down $0.99 to $31.62, Research, Estimates), while Robertson Stephens downgraded just Advanced Micro Devices.

Shares of RF Micro Devices (RFMD: down $5.08 to $10.16, Research, Estimates) were also under pressure after the maker of chips used in mobile phones said that second-quarter results will miss current expectations due to customers pushing back shipping dates of orders.

The threat of global terrorism has been a factor hanging over markets. In a televised address Thursday, President Bush called on Congress to add a new cabinet-level homeland defense agency. Separately, the Senate has passed a $31.5 billion counterterrorism bill.