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McDataundefined, technology provider for storage area networks, was up 31.2% in early afternoon ahead of its first-quarter earnings report, due after the close. Analysts expect earnings of 8 cents a share, according to Thomson Financial/First Call.

Merrill Lynch

cut its first-quarter estimates on McData to 6 cents from 7 cents, and 2001 estimates to 40 cents from 44 cents, citing steep reductions in IT spending. However, Merrill maintains its buy rating and said it has faith in the stock and the data storage sector long term.