Gateway

(GTW)

was down 2.7% in midmorning after

Merrill Lynch

cut its intermediate-term rating to neutral from accumulate. Merrill said there is a high likelihood that the computer company will sharply lower its earnings forecast during its analysts meeting this week.

Other PC stocks were also lower.

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Dell

(DELL) - Get Report

was down 1.9%, and

Compaq

(CPQ)

was slipping 1.5%.