The Night Watch: Horror Show for Tech Stocks

Updated from 5:12 p.m. EDT

The extra session turned hideous, especially for technology stocks, compounding the pain the major averages inflicted on investors during regular trading.

The culprit was Intel (INTC Quote), which lowered its revenue guidance for the second quarter. The chipmaker now expects a top line of $6.2 billion to $6.5 billion, a range well below analysts' estimates.

Shares of Intel were falling 10% to $24.30 after the company offered its guidance.

Intel tried to soothe Wall Street by saying it still expects a stronger second half of the year, but no one cared. From the looks of it, the broader market and tech shares in particular could be in for a rough session Friday.

That's not what investors want to hear of course, especially after the regular session Thursday in which the Dow Jones Industrial Average closed with a loss of 172.16 points, or 1.8%, to 9624.64.

The Nasdaq fell 40.38 points, or 2.5%, to 1554.88, and the S&P 500 dropped 20.75 points, or 2%, to 1029.15.

The Instinet volume leader board after the close revealed widely held tech stocks in a tailspin. The Nasdaq 100 Unit Trust (QQQ Quote) was down 3% to $27.98. Microsoft (MSFT Quote) was down 3.2%, and Cisco (CSCO Quote) was falling 5.2%.

Sun Micro (SUNW Quote) was lower by 4%. Dell (DELL Quote) was losing 6%, and Hewlett-Packard (HPQ Quote) was down 2%.

Overall, volume was heavy. In the first hour and 15 minutes of extended trading, more than 12 million shares changed hands among the 20 most active stocks on Instinet. Not surprisingly, Intel was the volume leader.

Anything in the chip and chip-equipment sectors was getting pummeled. Applied Materials (AMAT Quote) was falling 8%, while KLA-Tencor (KLAC Quote) and Novellus (NVLS Quote) were each losing 7%.

Kulicke & Soffa (KLIC Quote) was losing 8%, PMC Sierra (PMCS Quote) was down 6% and Integrated Silicon (ISSI Quote) was falling 7%.

Xilinx (XLNX Quote) was down 6%, and Integrated Device Technology (IDTI Quote) was tripping 7%.

Elsewhere, WorldCom (WCOM Quote) and Nortel (NT Quote) were dropping 4%. Palm (PALM Quote) was off 5%, Brocade (BRCD Quote) was losing 5%, and Oracle (ORCL Quote) was giving back 3%.