Tech stocks continued on a downward path on yet another day filled with angst over whether Congress will pass a $700 billion federal bailout package.

The Nasdaq slipped 78 points, or 3.8%, to 1991 in recent trading.

eBay ( EBAY) shares tumbled 8.6% to $19.06 after Morgan Stanley downgraded it to equal weight from overweight. The firm also slashed its third- quarter earnings estimate to 40 cents a share from 42 cents a share.

For 2009, Morgan Stanley expects earnings of $1.91 a share, down from its previous estimate of $2.04.

eBay's stock drop on Thursday marks only the second time shares have dipped below $20 since 2003.

Apple ( AAPL) shares were trading lower, down 6.4% to $102.19. Calyon Securities cut its price target on Apple to $130 from $190, and lowered its full-year earnings estimates to $5.99 a share from $6.10 a share. The firm points out that the company's notebook sales growth has slowed as a result of a weak economy.

Shares of Akamai ( AKAM) were also down on Thursday after Goldman Sachs lowered its rating to sell from neutral based on mounting competition in media and software delivery. The firm cut its price target to $14.50 from $21.50.

Akamai's stock was down 9.7% to $15.46.

Shares of Microchip Technology ( MCHP) and ON Semiconductor ( ONNN) were both falling after the two companies proposed to acquire Atmel ( ATML) for $5 a share in cash, or about $2.3 billion.

The offer represents a premium of 52% over Atmel's Wednesday closing price of $3.28 per share.

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