Sharp losses by Freddie Mac weighed down the markets during the midday with the Dow dropping 51 points to 12,907. Nasdaq lost 14 points to 2580.

On the upside

Second quarter earnings for Blue Coat Systems (Nasdaq: BCSI) more than doubled to beat expectations as sales surged.

Concur Technologies (Nasdaq: CNQR) reported fourth quarter earnings that quadrupled as customer growth exceeded expectations prompting the company to forecast first quarter results above estimates.

Barron's said that the stock price of Sasol (NYSE: SSL) could jump as much as 40% if crude oil prices remain high.

On the downside

Although higher revenue lifted third quarter earnings for Focus Media (Nasdaq: FMCN), shares of the Chinese advertising company plunged as margins slipped.

RBC Capital Markets analyst Mark Sue blamed slow wireless spending for lowering his earnings estimate and price target for LM Ericsson (Nasdaq: ERIC) while the telecommunications equipment maker warned that fourth quarter results will come in at the low end of its forecast.

Shares of Fannie Mae (NYSE: FNM) plummeted after Freddie Mac (NYSE: FRE) reported a $2 billion quarterly loss.

In the broad market, declining issues outpaced advancers by a margin of nearly 3 to 2 on the NYSE and by a margin of more than 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks dropped 9 points to 742.