Updated from 3:29 p.m. EDT

The major averages closed at their lowest levels since April, as blue-chips and tech stocks were scorched by bad news from tech companies.

The

Dow Jones Industrial Average broke below the 10,000 level around midday and finished down 171.32 points, or 1.7%, to 9919.58. The last time the Dow closed below 10,000 was April 9. The

Nasdaq dropped 51.56 points, or 2.8%, to 1791.61, and the

S&P 500 was down 20 to 1129.

Sun Microsystems

(SUNW) - Get Report

was crushed, falling $2.36, or 17.6%, to $11.07 after the Unix systems maker said it probably won't be profitable in the fiscal first quarter. Earlier in the session, Sun hit a 52-week low of $10.40.

AOL Time Warner

(AOL)

lost $2.50, or 6.5%, to $36.

Corning

(GLW) - Get Report

slid $2.55, or 17.5%, to $12.05 after the company disclosed plans to cut 1,000 jobs from its fiber unit and temporarily shut down operations at plants in North Carolina. The company also offered a gloomy outlook for overall fiber market growth.

Microsoft

(MSFT) - Get Report

was under pressure after the European Commission expanded an investigation of the software giant. The stock fell 5.5% to $56.94.

Lucent

(LU)

was the most active stock on the

New York Stock Exchange, where it traded down 50 cents, or 7%, to $6.67. Mobile phone maker

Nokia

(NOK) - Get Report

fell 83 cents, or 5.2%, to $15.30.

Looking at the major sectors, chips and Internet stocks took a pounding today, while biotech has sold off after trading higher for much of the day. In Treasuries, the 10-year note was down 9/32 to 101 17/32, yielding 4.804%.

Overseas, European stocks were lower. Telecom stocks fell following the Corning news, and the markets dropped after digesting the European Central Bank's decision to cut rates by a quarter of a percentage point. In London, the FTSE 100 fell 85 points, or 1.6%, at 5333. Japan's Nikkei 225 closed down 41 points, or 0.4%, to 10,939 as concerns over bad loans linger. Hong Kong's Hang Seng climbed 73 points, or 0.7%, to 11,316.