Even the most hardened investors — accustomed to the bearish atmosphere that has pervaded Wall Street for months — remain stunned by the Nasdaq composite index's plummet Monday below 2000 for the first time in 27 months, helping to slice the Dow Jones industrial average by more than 400 points.
"I'm not going to jump out any windows ... but this is
significant," said Jim Jordan, a Lexington, Ky., marketing
executive who estimates he's lost as much as $200,000 recently.
"I'm going to ride out the storm, though."
At market close, the Nasdaq was down 129.40 to 1,923.38. The technology-focused index is now 60 percent off the all-time highest close of 5,048.62, reached on March 10, 2000. The last time the index dropped below 2,000 in intraday trading was Dec. 16, 1998.
The Dow, meanwhile, fell 436.37 to 10208.25, while the Standard & Poor's 500 index lost 53.26 to 1,180.16. The Russell 2000 index fell 15.25 to 458.40.
Wall Street continued a sell-off begun last week following
warnings from tech bellwethers Yahoo!, Intel and Cisco Systems, all
of which said the weak economy will cut into their business in the
coming months.
"Investor sentiment is very fragile right now. You have no good
news to look forward to. Instead you have continuing bad news from
the high-tech sector," said Bill Barker, an investment strategy
consultant at Dain Rauscher. "The Nasdaq is in a freefall and
every time you try to time the bottom of this market, you get your
head handed to you."
Cisco dropped as Wall Street continued to react to the
networking company's announcement it will trim several thousand
positions, chiefly through attrition, because of soft demand for
its products. Cisco was off $1.56 at $19.06, a 7.6 percent loss.
Investors also sold off Intel, down $1.19 at $28.25, and
Microsoft, down $4 at $52.69. Yahoo! rose 6 cents to $17.06,
temporarily halting a losing streak that began Wednesday on
earnings worries.
The Dow fell along with its technology components, which include
Intel and Microsoft, but stocks considered less risky investments
in times of economic weakness also declined. Merck fell 80 cents to
$74.89, while Philip Morris dropped $1.48 to $50.27. General
Electric dropped $3.11 to $40.70.
Dain Rauscher investment consultant Bill Barker said the
market's decline is the result of several factors, including
disappointment that the Federal Reserve isn't lowering rates more
aggressively. Margin calls might be another factor, as the sinking
market forces investors to sell stocks to repay brokerage loans.
The biggest factor, however, is investors' frustration over the
fact that there's no apparent end to weak earnings. With the end of
the financial quarter approaching and earnings warnings season
beginning, Wall Street senses the bad news may just be starting.
Trading activity accelerated as the day wore on. Declining
issues outnumbered advancers by more than 3 to 1 New York Stock
Exchange. Volume came to 930.99 million shares, well ahead of
833.50 million at the same point Friday.
— The Associated Press contributed to this report
