Nasdaq Doesn't Want to Look in the Mirror After Today's Showing

Investors seem to be believing the techs aren't as pretty as they let on. The Comp swoons 186.76 points.
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Yes, today was ugly, but it could have been uglier.

The Nasdaq closed down 186.76, or 4%, at 4457.91, though that was about 100 points from its intraday low of 4355.69.

TheStreet.com Internet Sector

index finished down 28.74, or 2.6%, at 1095.34, far from its session low of 1052.38.

TheStreet.com New Tech 30 closed down 38.82, or 5.1%, at 717.35.

While the recovery was impressive and was leading some talking heads to conclude that the worst was over, momentum still remains to the downside and it will be up to the bulls to try to prevent another leg down. Tomorrow also is the end of the first quarter, and buyers could return on Monday when the second quarter begins.

Nevertheless, the technicals have weakened. The

Nasdaq

breached some key support today at 4455, which was the low from March 16, although it did manage to close above that level. Some technicians have

targeted 3900 as a level the Nasdaq could drop to. It is roughly a 50% retracement of its up move from 2700 from October of last year to 5100 made earlier this month.

And while fundamentals have not really changed, and the sector is still expected to post solid first-quarter results, there has been a shift in investor sentiment. Valuations of many of the Internet stocks are now being questioned. That shift began when

Barron's

pointed out burn rates of many Internet companies, and was further reinforced by

comments made by

Templeton

fund manager Mark Mobius yesterday. Throw in a shift in the weightings by influential

Goldman Sachs

analyst Abby Joseph Cohen on Tuesday, in which she was no longer overweighting technology, and the highly publicized

problems at

Tiger Management

and you have the scenario for a full-scale selloff.

On to the numbers. Among the leading decliners,

FreeMarkets

(FMKT)

closed down 20, or 13%, at 135, though it traded as low as 119 7/8.

Phone.com

(PHCM)

ended down 22 1/2, or 13%, at 146 15/16 after trading as low as 136 7/8.

Verisign

(VRSN) - Get Report

ended down 16 1/16, or 9.5%, at 153 3/16 after trading as low as 148 9/16.

Extreme Networks

(EXTR) - Get Report

finished down 15 3/8, or 16%, at 82, while

Tibco Software

(TIBX)

plummeted 16 3/4, or 16%, to 87 1/4.

Among stocks in the news,

Yahoo!

(YHOO)

ended down 7 9/16, or 4.3%, at 169 1/2 after it said in a filing with the

Securities and Exchange Commission

that the

Federal Trade Commission

is looking into its consumer-information practices.

Neoforma

(NEOF)

closed down 10 1/2, or 35%, at 19 7/8. The online medical-product and supply company said that it would buy

Eclipsys

(ECLP)

for about $1.45 billion in stock. The move comes less than a month after Eclipsys made an unsolicited $2 billion bid to buy

Shared Medical Systems

(SMS)

.

Internet venture capital firm

CMGI

(CMGI)

announced a strategic alliance with publishing company

Primedia

(PRM)

As part of the alliance, CMGI will acquire 8 million shares of Primedia, or approximately 5%, in exchange for 1.53 million shares of CMGI. CMGI finished down 2 3/16, or 2%, at 109 5/8.

Finally,

Excite@Home

(ATHM) - Get Report

, which rallied 10% yesterday on news of an expanded

relationship with

AT&T

(T) - Get Report

, closed down 4 1/2, or 12%, at 33 3/16.