Some in the media went on and on about how today's losses in the technology sector came on light volume. While a large move on light volume doesn't mean as much as one on high volume, a 258-point loss is a 258-point loss no matter how you slice it.
After its impressive recovery late last week, tech took it on the chin again today, reeling from a number of bearish comments from research firms and a shift in emphasis from a venture fund. The
dropped 258.25 points, or 5.8%, to 4188.20, though it was one of the lightest volume days of the year.
TheStreet.com Internet Sector
index closed down 92.52, or 8.8%, at 960.05.
TheStreet.com New Tech 30 index finished off 50.62, or 7.5%, at 625.65.
Bulls may point out that a 258-point loss only brought the Nasdaq back to where it was a couple of sessions ago, as the Nasdaq did manage to close above last Wednesday's close of 4169.34. But today's losses could indicate a change in sentiment away from tech.
There were a number of bearish reports from research firms, including one from
chief market analyst Richard McCabe, who wrote that the technology sector had begun a corrective trend and suggested investors reduce exposure to some of the stocks in the sector.
Credit Suisse First Boston
, meanwhile, wrote that the rotation of investments into non-tech areas of the S&P 500 represented "the onset of a medium- or longer-term portfolio reweighting."
"A gradual rather than chaotic adjustment to the excesses engendered by momentum trading, leverage, and overconfidence might extend for several quarters. Some adjustments have extended for years," wrote Credit Suisse First Boston analysts Christine Callies and Puru Sareen.
Among traditional Internet plays,
closed down 25 3/16, or 14%, at 155 11/16;
finished down 4 3/16, or 6%, at 63 3/8;
dropped 7 9/16, or 12%, to 52 5/16;
dropped 5 3/16, or 6.7%, to 72 7/8; and
lost 19 5/8, or 11%, to 161 1/4.
post-earnings woes continued, as it finished down 9 3/16, or 6%, at 141 15/16; the stock closed at 165 9/16 in advance of its earnings report last Wednesday.
Business-to-business plays were smacked down by
news that Internet business incubator
had shifted its primary focus away from developing business-to-business Internet commerce companies. Safeguard lost 1 9/16, or 2.6%, to 57 15/16, while
Internet Capital Group
, which helps fund business-to-business concerns and is partially owned by Safeguard, closed down 8 11/16, or 12%, at 64.
Among other B2B plays,
closed down 28 7/8, or 21%, at 108 1/16;
finished off 29 7/16, or 15%, at 171 1/2;
dropped 20 1/2, or 15%, to 119 1/2;
slipped 21 3/16, or 17%, to 99 13/16; and
lost 18, or 15%, to 99 3/8.