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Investors alarmed by a series of warnings from high-tech companies pummeled stocks today, sending the Nasdaq composite index skidding below 2000 for the first time in 27 months and slicing more than 400 points from the Dow Jones industrial average. Nasdaq breaks
below 2,000;
Dow sinks 436The tech-heavy index falls 129
and is now off 61.9% from last
March's all-time highBy Lisa Singhania
Associated PressWall Street continued a selloff begun last week following bleak announcements 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 extremely negative right now. In the immediate future there is nothing but grim news ahead as earnings revisions downward continue," said Peter Anderson, chief investment officer at American Express Financial Advisors.
The Nasdaq fell 129.40 at 1,923.38, a 6.3 percent loss. The technology-focused index is now 61.9 percent off the all-time high of 5,048.62 reached on March 10, 2000. The last time the index traded below 2,000 was Dec. 16, 1998.
The Dow, meanwhile, fell 436.37 to 10,208.25, a 4.1 percent decline, leaving it nearly 13 percent from its high of 11,722.98, reached Jan. 14, 2000.
The drop was the Dow's fifth-biggest point loss, but the blue chips managed to recover from a decline of 477 points shortly before the close.
Wall Street's broadest measure, the Standard & Poor's 500, plunged 53.26 to 1,180.16 for a loss of 4.3 percent. The S&P is now down nearly 23 percent from its all-time high of 1,527.46 on March 24 of last year.
Trading activity accelerated as the day wore on. Decliners outnumbered advancers 4 to 1 on the New York Stock Exchange, with 2,416 down, 693 up and 168 unchanged. Volume was 1.23 billion shares vs. 1.08 billon on Friday.
The NYSE composite index fell 23.02 to 605.97, the American Stock Exchange composite index lost 22.27 to 909.08 and the Russell 2000 index fell 15.25 to 458.40. The Treasury's 10-year note rose 9/32 to 100 27/32; its yield fell 4 basis points to 4.89 percent. The 30-year bond gained 11/32 to 101; its yield fell 2 basis points to 5.30 percent.
The losses were spread across the markets. "I've lost about 20-25 percent of my investments," said Tim Penning, a 37-year-old public relations director in Grand Rapids, Mich. "I look at my portfolio and all I see is red. I do feel a little worried but I'm constantly being told by my broker and friends that I've got plenty of time before I'll need this money, and not to get upset."
Technology's losses were the most evident, reflecting investors' worries that parts of the sector are still overpriced and might take a while to recover because of the weakened economy.
Cisco dropped as Wall Street continued to react to the networking company's announcement Friday it will trim several thousand positions, chiefly through attrition, because of soft demand for its products. Cisco was off $1.81 at $18.81, a nearly 9 percent loss.
Investors also sold off Intel, down $1.69 at $27.75, and Microsoft, down $4.75 at $51.94.
"People are pitching stocks over the side no matter what. They're finally giving up," Anderson said.