Technology stocks continued to backpedal in follow-through selling from Tuesday's decline.

The

Nasdaq

was down 102.24, or 2.7%, at 3683.21 in early trading, while

TheStreet.com Internet Sector

index was off 1.63, or .19%, at 869.43. An earnings

warning from

Novell

(NOVL)

was contributing to some of the uneasiness in tech. Our house technician,

Gary B. Smith

, took a look at price action in the Nasdaq and provided a detailed analysis of

Exodus Communications

(EXDS)

in an earlier

piece.

Among Internet stocks in the news,

America Online

(AOL)

was down 3/8, or 0.7%, at 57 3/8. AOL and

Coca Cola

(KO) - Get Report

entered into a two-year marketing agreement, according to

The Wall Street Journal

. Coke will pay AOL $24 million for access to AOL services, according to the paper, while both companies will contribute $20 million in marketing support.

Online financial stocks were getting hurt for the second straight day, particularly

Knight/Trimark

(NITE)

, which was down 1 7/16, or 4%, at 34 9/16.

Chase Securities

put out a note on the company that was not as negative as some may have interpreted it to be.

Chase analyst Gregory Smith wrote that

Autex

figures indicated that Knight/Trimark's market share of combined Nasdaq and over-the-counter Bulletin Board stocks fell to 13.8% in April compared to 15.9% in March and 21.9% in February. But Smith wrote that "while OTC activity represents a significant portion of Knight's business, we believe the decline in OTC BB volume was likely offset by abnormally heavy volatility in Nasdaq stocks during April, still creating a very strong month for the company." Smith encourages investors to look at volume numbers that Knight/Trimark releases on the tenth business day of the month rather than rely on the Autex data. Chase Securities has not done underwriting for Knight/Trimark.

Elsewhere,

CDNow

(CDNW)

was down 9/16, or 13%, at 3 5/8 after missing quarterly estimates. The online music retailer reported a loss of 92 cents a share vs. the 88-cent loss estimate from

First Call/Thomson Financial

. Also,

Go.com

(GO) - Get Report

was down 5/16, or 2.2%, at 14 1/16 after posting a 47-cent loss vs. the 54-cent loss estimate from First Call.

CDNow unveiled a new operating plan that the company said was designed to trim operating expenses by more than $12 million per quarter and reduce customer acquisition costs by 50%. It also reiterated that it was seeking a merger partner or investor.

Emusic

(EMUS)

was up 7/8, or 41%, at 3. Emusic and

RollingStone.com

yesterday announced an alliance with

Microsoft

(MSFT) - Get Report

to provide music content to the music guide of

WindowsMedia.com

, which is Microsoft's guide to audio and video on the web.