Updated from 1:57 p.m. EST with new stock prices

Tech stocks were down sharply on fears of a recession that rattled the markets globally. The Federal Reserve moved to stabilize the markets by cutting the fed funds rate by a surprising 75 basis points to 3.5%.

Research In Motion ( RIMM) was up $1.58, or 1.9%, to $90.09 after the company announced updates for its BlackBerry platform.

Motorola ( MOT) sank 7.6% ahead of the company's fourth-quarter earnings Wednesday.

Analysts expect the company to report earnings of 13 cents a share in the quarter on revenue of $9.6 billion, compared to 26 cents a share on revenue of $11.8 billion a year ago. Shares of Motorola were off $1.01, hitting a new 52-week low of $12.32.

Shares of Alcatel Lucent ( ALU) fell 12% after Goldman Sachs research analysts cut their rating on the stock and adopted a cautious attitude toward the telecom sector on fears of a economic slowdown. The firm downgraded Alcatel Lucent to sell from neutral. The stock declined 83 cents to $6.07.

Cisco ( CSCO) fell 3.6% on fears of a slowdown in the telecom sector. Shares of the company were off 88 cents to $23.42.

eBay ( EBAY) gave up 4.2% after a report in The Wall Street Journal that longtime CEO Meg Whitman is preparing to retire. eBay reports its fourth-quarter earnings Wednesday.

Analysts polled by Thomson Financial are expecting EPS of 41 cents for the quarter on revenue of $2.13 billion compared with earnings of 31 cents a share on revenue of $1.71 billion the year before . Shares of the company were down $1.20 to $27.13.

Microsoft ( MSFT) was down $1.02, or 3.1%, to $31.99 despite the company's announcement that it will bundle a range of virtualization extensions to desktops and add system management tools.

Microsoft also said it will acquire a privately held company, Calista Technologies, for an undisclosed price.

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