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Nasdaq sinks 258;
Dow up 75The tech-heavy index suffers
Associated Press
its 2nd-worst point drop everNEW YORK -- Technology shares slumped today, pulling the Nasdaq composite index down more than 250 points and proving that the nervousness and volatility that shook Wall Street last week has not left.
Blue-chip stocks and bond prices rose, however, as investors sought their more stable and predictable returns.
The Nasdaq composite index dropped 258.25, or 5.8 percent, to close at 4,188.20, its second-largest point drop ever. The increasingly volatile index has recorded nine of its 10 worst point drops since the start of the year, as well as nine of its 10 biggest point gains. For the year to date, the technology-heavy index is up 4.6 percent.
The Dow Jones industrial average gained 75.08 to 11,186.56. The Dow is down 2.6 percent year to date. Financial shares led the advance after a Merrill Lynch strategist recommended clients move some money from technology stocks into financials.
The Standard & Poor's 500 fell 11.89 to 1,504.46, leaving that index up nearly 2.9 percent so far in 2000.
Decliners beat advancers by a 8-to-7 margin on the New York Stock Exchange, with 1,597 down, 1,379 up and 465 unchanged. NYSE volume totaled 854.81 million vs. 892.79 million Friday. The NYSE composite index rose 0.28 to 659.71; the American Stock Exchange composite index lost 30.65, or 3.1 percent, to 958.04; and the Russell 2000 index fell 24.33, or 4.5 percent, to end at 518.66.
The price of the Treasury's main 30-year bond was down point, or $6.25 per $1,000 in face value; its yield fell to 5.67 percent from 5.70 percent late Friday.
Technology stocks fell in a steady spiral as investors wondered whether upcoming first-quarter earnings reports will justify the high prices of tech issues.
The selloff was a clear indication that the weakness that gripped the sector last week has not run its course, said Tony Dwyer, chief market strategist at Kirlin Holdings. "The rebound we saw last Friday was just too quick," he said. "The market is not back to normal, because valuations for a lot of these technology stocks remain too extreme."
Declines hit varied tech stocks. Microsoft and Applied Materials fell steeply on the Nasdaq. Yahoo! and BroadVision also declined. Last week, Dwyer said, many investors hopped back into the market on the promise of strong first-quarter earnings. The reporting season picks up this week. In recent weeks, many Wall Street strategists have reminded clients that the strongest earnings growth this quarter is expected not from the technology sector, but from the less heralded energy sector.