How low can you go? The Nasdaq was involved in its own limbo dance today, free-falling its way toward 3000.
In recent trading, the Nasdaq was down 181.58, or 5.4%, at 3208.8. It had traded as low as 3172.65, below the 3227 low from April 17.
TheStreet.com Internet Sector
index was down 50.18, or 6.1%, at 773.65.
Losses stretched across all of the Internet sector. Among the hardest hit was
, down 12 9/16, or 29%, at 31 1/4 on news that it would acquire
in a stock deal valued at $1.7 billion. The market has been punishing companies that are buying out other companies, selling first, then figuring out whether the deal is a positive one later. In addition. Vignette was buying OnDisplay at a 39% premium, which investors may not have been happy with.
, which said it will acquire
in a stock deal valued at $1.3 billion, was down 15 1/4, or 17%, at 72 1/4.
joint newsroom took a look at both deals in an earlier
Also among the leading decliners,
was off 5 11/16, or 9%, to 53 1/16 as it continued to suffer after it agreed to be bought by
amid concern that Terra will not be able to pull off the deal. Lycos did announce that it was launching portal sites for China, Hong Kong and Taiwan.
was down 8, or 10%, at 72 15/16 as profit-taking after its earnings report last week continued.
was down 8 5/8, or 7%, to 107 1/2, while
was off 3 15/16, or 8%, to 48 11/16.
Among some other business-to-business names,
was down 5 5/8, or 14%, at 35 5/8, while
was off 6 5/8, or 10%, at 57 7/8. B2B plays continue to be among the most volatile in the sector.
was down at 15/16, or 0.78% to 119 3/8. The company today launched
, a stock purchase plan that gives individual investors the ability to purchase shares of Yahoo! common stock directly from Yahoo!.
There were enough factors out there that will likely keep the tech sector under pressure going forward. With uncertainty about whether the
will continue to raise rates, there were few fundamental reasons to buy into an already shaky market. In addition, the market is out of earnings season and has little in the way of catalysts heading into what traditionally is a slow summer period.
Technical indicators were not looking good as well. Bob Dickey, director of technical research with
Dain Rauscher Wessels
, said today's close will go a long way toward determining market direction for the next couple of weeks. He was focusing on the 3300 area, or a rounded area from the 3227 low, with a close below there "quite negative," and pointing to a test of 2900 in the Nasdaq. Around 12:30 p.m. (EDT) today, he gave 20% odds that the Nasdaq would close above 3300.
But a close right around 3300 would be about the worst thing as far as providing an indicator about where things are going. Should the Nasdaq close around 3350 or 3400, he said that it would suggest a low for the next couple of weeks. Time frame to reach 2900 on a close below 3300 would be one to two weeks, though he would expect it "sooner rather than later."
And when do you buy? Dickey said he still did not see the panic suggestive of a bottom, which is why he was still looking for the 2900 level to be hit. What will likely occur, he said, is that the market will go down hard and reach a bottom, then trade sideways for a while. At that point, people will lose faith in the market and he said that is the time to buy.
Dickey said the Nasdaq was modestly oversold, but would need a few more down days to be at an oversold level where he would expect a bounce.