SAN FRANCISCO - eBay ( EBAY) shares were tumbling in recent trading after Morgan Stanley downgraded its rating. The stock slipped 8.4% to $19.10, marking only the second time it has dipped below $20 since 2003. Analyst David Joseph of Morgan Stanley chopped his rating on eBay to equal weight from overweight. He also slashed his third-quarter earnings estimate to 40 cents a share from 42 cents a share. For 2009, Joseph expects earnings of $1.91 a share, down from his previous estimate of $2.04. In his research, Joseph points to deterioration in eBay's core marketplace as well as "greater economic sensitivity and poor demand." He also expects this holiday season to be challenging for the online auction giant. Thursday's steep stock drop-off indicates eBay's susceptibility to negative news, especially when added to existing investor fears over the larger economy. Although Jeffries analyst Youssef Squali maintains a buy rating on eBay, even he offers some caution. In his latest research note, Squali points to an estimated growth in listings for eBay in the third quarter of 24% over last year in the same period. But, he adds, "given the macro weakness, we believe that soft consumer demand will lead to lower conversion (and take) rate and lower average selling price." The take rate is the percentage of revenue the company makes for each dollar of gross merchandise sales. Squali also notes that with 54% of revenues derived from outside of the U.S., the strengthening of the dollar against the Euro could hurt foreign currency exchange, which could eat into eBay's profit and revenue.