The tech-heavy Nasdaq Composite Index was down 73.45 at 3804.09 near midday on Thursday. The index had reversed course Wednesday, halting a two-day slide at 10 percent. Analysts stressed that the brief selloff was a small price to pay for the 50 percent gain of the past two months or the 85 percent gain for all of 1999.

In fact, rather than the fears of rising interest rates widely blamed for the sudden downturn, the sheer size of 1999's gains may have been the driving force behind the post New Year's drop, many analysts said.

With such huge profits tucked away in stocks, many investors were waiting to sell after Dec. 31 so they could delay paying taxes on those gains until April 2001.

While most experts agree that there's plenty of excess that can be wrung from technology stocks, they also stand by the main premise behind 1999's stock swell — that even though most Internet companies continue to lose money, all companies will eventually prosper from the rapid spread of the Internet.

The main question Wednesday wasn't why, but how long and how far stocks might drop before resuming the rally of the past five years.

The selloff didn't stop Goldman Sachs on Tuesday from issuing a list of stocks the investment firm expects to rise at least 35 percent this year. More than a third of the 85 names on that list were Internet-related, including America Online, the leading Web service, and Cisco Systems, the biggest manufacturer of Internet equipment.

"The Internet is the most important business phenomenon in our lifetime," said Byron Wien, the U.S. investment strategist at Morgan Stanley Dean Witter. "I still believe that, but many stock prices were suggesting a profit reality that was pretty hard to achieve."