"Explorer8939" wrote:
Does Hubble perform observations while in direct sunlight (ie the
period of its orbit when it is not in the Earth's shadow.

Yes, it does, routinely. Hubble has a shade that extends
well beyond the position of the secondary mirror as well
as a system of interior light baffles. The lack of an
atmosphere in orbit allows Hubble to view stars even while
it is in direct sunlight, provided the telescope is kept
pointed a minimum angle away from the Sun.

Interestingly, future telescopes will be even more in the
Sun than Hubble is currently, as they will go into higher
orbits, Solar orbits, or other locations farther from
Earth (e.g. Earth-Sun Lagrange points). Both the JWST
and the SIRTF will be in direct sunlight essentially all
the time. Both will employ systems to keep the light out
of the optical systems though. In fact, JWST will deploy
a large sunshade that will keep the entire optical
assembly (including the instruments) in permanent shadow.