Memo to

CNBC

producers: You can shelve the special for a while.

Stocks suffered their worst losses since

Jan. 14 as worries about corporate earnings, the potential for war in Kosovo and various and sundry other concerns convinced investors selling was the prudent course.

The

Dow Jones Industrial Average

fell as low as 9632.71 before closing off 218.68, or 2.2%, to 9671.83.

Several stocks, representing a variety of industry groups, conspired to lead the Dow's decline, including

General Electric

(GE) - Get Report

,

General Motors

(GM) - Get Report

,

J.P. Morgan

(JPM) - Get Report

,

United Technologies

(UTX) - Get Report

and

Merck

(MRK) - Get Report

.

The Dow's technology components held up relatively well and

Compaq

(CPQ)

, the focus of much of the recent earning concerns, closed up 1.7%. But overall, bellwether technology names again faced harsh selling. The

Nasdaq Composite Index

tumbled 73.10, or 3.1%, to 2322.84. The point decline is the ninth-largest in Nasdaq history and its worst since a 78.29-point loss

Oct. 5.

Over-the-counter leaders such as

Microsoft

(MSFT) - Get Report

and

Dell

(DELL) - Get Report

sustained big declines, as did Big Board-traded stalwarts such as

Texas Instruments

(TXN) - Get Report

and

America Online

(AOL)

.

The

Nasdaq 100

shed 3.3%, the

Philadelphia Stock Exchange Semiconductor Index

lost 4.3% and the

Morgan Stanley High-Tech 35

shed 3.7%.

With AOL suspending its recent string of gains and other Internet favorites falling in turn,

TheStreet.com Internet Sector

index fell 36.70, or 5.8%, to 596.81.

TheStreet.com E-Commerce Index

lost 6.06, or 5.3%, to 108.17.

'I think the market has some technical problems,' Gotham Capital Management's Ronny Kraft said. The Dow 'could conceivably come down to 9500, then we get a bounce. If it doesn't, the next stop sign is 9100. If it breaks that, it could come down to 8800.'

As big-cap financial, transportation, retailing, and consumer- and cyclical-focused names joined technology on the downside, the

S&P 500

had little choice but to follow suit. The index closed down 34.87, or 2.7%, at 1262.14 after trading as low as 1257.50 intraday.

Small-caps also took a licking; the

Russell 2000

closed down 9.83, or 2.5%, to 383.37, reflecting breadth figures even worse than the recent trend.

Many market players expressed disappointment but said today's setback was normal, citing the familiar "too far, too fast" refrain. Ronny Kraft, CEO of

Gotham Capital Management

, believes that outlook is too optimistic.

"I think the market has some technical problems," the hedge-fund manager said. The Dow "could conceivably come down to 9500, then we get a bounce. If it doesn't, the next stop sign is 9100. If it breaks that, it could come down to 8800."

Kraft foresees the Nasdaq falling as low as 2250, believing "you've got some stocks that are really broken." Gotham Capital currently has short positions in

DoubleClick

(DCLK)

, which fell 5.2% today,

Chase

(CMB)

, off 2.8%, and Dell, which slid 5.6%.

Dell's near-term performance will be particularly telling, Kraft said. Dell closed today at 35 11/16, just above its 200-day moving average of around 33 1/3. Its ability to maintain itself above that level will be key to the market's near-term prospects, he said.

The PC manufacturer is the "GE of the tech sector. It's one of our leaders," Kraft said. "Dow 10,000 didn't feel right because technology was not a leader. No one wanted to write that Dow 10,000 ticket."

In

New York Stock Exchange

trading, 819 million shares traded while declining stocks whipped advancers 2,337 to 660. In

Nasdaq Stock Market

activity 980.5 million shares were exchanged while losers dominated 2,876 to 1,138. New 52-week lows led new highs 134 to 16 on the Big Board and by 128 to 16 in over-the-counter trading.

'The Equity Markets Are Fragile'

The market's "technical underlying strength is waning," said Louise Yamada, senior technical analyst at

Salomon Smith Barney

. "The equity markets are fragile and it would not be unwarranted to see a 10% consolidation" in the Dow and S&P and 15% correction in the Nasdaq from recent highs.

Speaking at the firm's annual media outlook luncheon, Yamada compared the current environment to late 1989-early 1990, when 12 months of "negative technical divergences" led to a sharp reversal. Currently, technical indicators have been heading negative for 11 months, she said.

In a follow-up conversation this afternoon, the technician said the Dow could fall as low as 9000, the S&P 500 to 1184 and the Nasdaq to 2259 and still be within the bounds of a "normal" technical reversal after the stunning gains registered since the Oct. 8 lows.

Yamada foresees recent leadership groups such as technology, telecom, and drug makers "extended" and "depressed areas" such as cyclicals assuming the reigns. However, "there is no structural evidence of sustainable leadership" by the cyclical stocks, she said, believing the current leaders will return to the fore later in the year.

A wild card is the financials, which had shown "early evidence of relative outperformance," fitting her expectation interest rates will continue to decline and "support a good stock market advance."

The price of the 30-year bond rose 6/32 to 95 18/32 today, its yield sliding to 5.56%. Nonetheless, financials were badly damaged. The

Philadelphia Stock Exchange/KBW Bank Index

fell 3% and the

American Stock Exchange Broker/Dealer Index

lost 4.2%.

For the second and third quarters, the technician foresees a "continued corrective trend" in both the stock and bond markets, with the recent uptick in crude prices perhaps a catalyst. In response to a reporter's question, Yamada said the potential for warfare in Kosovo could also generate instability and thus, more selling.

Early in the day, U.S. special envoy

Richard Holbrooke

and Yugoslav President

Slobodan Milosevic

ended their talks in Belgrade without making a deal to avoid warfare in the Balkans. Later in the day,

President Clinton

asked

Congress

to support a

NATO

attack on Serb forces in and around Kosovo. In protest, the plane carrying Russian Prime Minister

Yevgeny Primakov

turned around while en route to Washington for a planned visit.

It's not quite

Nikita Khrushchev

having the Russian battleships turn around on their way to Cuba in 1962, but Primakov's ploy is about as dramatic as U.S.-Russian relations get these days.

"The market doesn't like war unless the prizes are really cool," Kraft said. "Low oil is always a great prize. What prizes are we bringing to the market from Kosovo?"

Among other indices, the

Dow Jones Transportation Average

fell 80.57, or 2.5%, to 3195.11; the

Dow Jones Utility Average

fell 3.27, or 1.1%, to 299.95; and the

American Stock Exchange Composite Index

lost 14.04, or 2%, to 703.32.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

plunged 114.34, or 1.7%, to 6482.23 and the

Mexican Stock Exchange IPC Index

skidded 83.23, or 1.8%, to 4632.07.

Tuesday's Company Report

By Heather Moore
Staff Reporter

(

Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.

)

Dow component

Coca-Cola

(KO) - Get Report

fizzed down 1 13/16 to 65 7/8, off its session low of 64 13/16, after

Merrill Lynch

cut its first-quarter earnings estimate for the soft-drink giant to 31 cents a share from 32 cents and its full-year 1999 view to $1.45 from $1.50.

Elsewhere in earnings carnage,

PathoGenesis

(PGNS)

decayed down 26 13/16, or 69%, to a three-year low of 12 3/16 after last night warning it expects to report a first-quarter loss of 30 cents a share. Analysts were expecting earnings of 20 cents. The company blamed slower sales due to fluctuations in ordering patterns for its

TOBI

drug for managing pseudomonal lung infections in cystic fibrosis patients.

TheStreet.com

reported problems with the company in a

July 2 story.

Mergers, acquisitions and joint ventures

American Residential Services

(ARS)

shot up 1 1/16, or 24.3%, to 5 7/16 after

ServiceMaster

(SVM) - Get Report

agreed to buy the company for $92 million in cash and $180 million in assumed debt. ServiceMaster lowered 7/16 to 19 1/8.

DoubleClick dropped 9 3/16, or 5.2%, to 167 even after entering an advertising deal with

Road Runner

, a high-speed Internet access service. Yesterday, DoubleClick announced a contract to supply advertising information to

Comcast

(CMCSA) - Get Report

, which closed flat at 64 3/4.

Separately,

Modem Media.Poppe Tyson

(MMPT)

surged 6 11/16, or 18%, to 43 13/16 after Scott Bleier, chief investment strategist at

Prime Charter

, compared the interactive ad agency with other "Internet highfliers" such as DoubleClick and

24/7 Media

(TFSM)

on

CNBC

. 24/7 declined 4 3/16, or 8.3%, to 46 1/4.

Leap

(LEAP)

leapt 1 13/32, or 66.2%, to 3 19/32 after its

Quantum Leap Communications

Internet advertising agency launched a new brand campaign for Microsoft's

Slate

online magazine. Mister Softee declined 6 5/16 to 166 9/16.

Unicom

(UCM)

, parent of

Commonwealth Edison

, lifted 1/16 to 38 1/4 after agreeing to sell six ComEd coal-fired generating plants, its Collins Station and nine peaking unit sites to

Edison Mission Energy

, a unit of

Edison International

(EIX) - Get Report

, for $4.8 billion. Edison International rose 1/8 to 24 3/4.

Earnings/revenue reports and previews

Atlantic Coast Airlines Holdings

(ACAI)

dwindled 1 3/4, or 6.8%, to 24 1/4 after last night warning it sees first-quarter earnings of 16 cents to 19 cents a share, including the effect of inclement weather, which reduced earnings by 3 cents to 5 cents. The company said it had more than 900 flight cancellations due to weather during the first 21 days of March -- traditionally the airline's strongest month for traffic. The five-analyst estimate called for 20 cents vs. the year-ago 16 cents.

BellSouth

(BLS)

sank 2 13/16, or 6.2%, to 42 3/4 after

Goldman Sachs

lowered its first-quarter earnings outlook for the company to 45 cents a share from 47 cents after talking with company officials. Saying it sees spending for new services and some of the impact of its investment in Brazil to be weighted toward the first half of the year, Bell South said it sees first-half earnings growth at the low end of 19% to 21%.

Brookstone

(BKST)

tacked on 1/16 to 12 3/8 after reporting fourth-quarter earnings of $2.25 a share, beating the two-analyst view of $2.21 and moving ahead of the year-ago $1.87.

Cabletron Systems

(CS) - Get Report

shaved off 1 3/16, or 11.8%, to 8 7/8 after last night reporting fourth-quarter earnings of a penny a share, above estimates for a 1-cent loss, and announcing plans to cut 300 jobs. The company also said it will outsource manufacturing operations to

Celestica

(CLS) - Get Report

in the restructuring. Celestica fell 3/16 to 27 1/4.

Conseco

(CNC) - Get Report

chopped off 2 1/16, or 5.8%, to 33 1/2 after

The Wall Street Journal's

Heard on the Street column quoted a couple of analysts saying the company is showing signs of strain from a 16-year acquisition spree that may make it difficult for the company to maintain projected earnings growth.

Discount Auto Parts

(DAP)

sloughed off 11/16 to 20 3/8 after posting third-quarter earnings of 40 cents a share, in line with the five-analyst estimate but down from the year-ago 42 cents.

Family Dollar

(FDO)

hopped up 11/16 to 20 7/16 after announcing second-quarter earnings of 24 cents a share, 2 cents higher than the nine-analyst expectation and above the year-ago 16 cents.

First American

(FAM) - Get Report

slid 4 1/16, or 9.9%, to 37 after last night saying it sees its first-quarter and full-year earnings missing the 11-analyst estimate of 71 cents a share and the 13-analyst estimate of $2.99 a share, respectively. The company cited unanticipated client attrition with resulting balance declines and higher expense levels in client service areas.

Innotrac

(INOC)

vaulted 4 1/8, or 36.7%, to 15 9/16 after last night saying it expects first-quarter revenue and earnings to come in better than estimated because of strong caller ID volume, resulting from heavy promotion over the last two months. The company sees earnings of 33 cents to 35 cents a share -- above both the two-analyst forecast for 26 cents and the year-ago 21 cents.

Just For Feet

(FEET)

slipped 7/8, or 7.8%, to 10 3/8 after posting fourth-quarter earnings of 9 cents a share, in line with the seven-analyst estimate but below the year-ago 20 cents.

Petco Animal Supplies

(PETC)

climbed 1 9/16, or 24%, to 8 1/8 after recording fourth-quarter earnings of 37 cents a share, 3 cents higher than the three-analyst forecast and above the year-ago 25 cents.

Pillowtex

(PTX) - Get Report

tumbled 4 7/8, or 27.9%, to an annual low of 12 5/8 after warning both its first- and second-quarter earnings will fall below expectations, citing inefficiencies incurred during the installation of new computer systems, higher-than-anticipated manufacturing costs of new products and costs related to the closing of an Alabama plant. The company expects to earn 40 cents a share in the first-quarter, below expectations for 60 cents, and 50 cents in the second quarter, below expectations for 57 cents. Merrill Lynch dropped the stock to near-term neutral from buy while maintaining its long-term buy.

NationsBanc Montgomery Securities

lowered it to hold from buy.

Wyman-Gordon

(WYG)

slid 3/8 to 8 7/8 after reporting third-quarter earnings of 18 cents a share, missing the five-analyst view by 2 cents but moving ahead of the year-ago 11 cents.

Offerings and stock actions

Autoweb.com

(AWEB)

rocketed up 25 13/16, or 184.3%, to 40 after

Credit Suisse First Boston

priced its 5 million-share IPO above range at $14 a share last night. Meanwhile,

autobytel.com

(ABTL:Nasdaq) raised the price range of its planned IPO -- expected to price tonight for tomorrow's trading -- to $20 to $22 a share from $16 to $18 a share.

Bridgeport Machines

(BPTM)

lowered 7/8, or 13.2%, to 5 3/4 after declining to repurchase up to 50% of its shares, as suggested by privately held

High Technology Holding

, which owns more than 10% of the shares.

Globix

(GBIX)

slumped 4, or 9.8%, to 37 after selling 4.61 million shares at $37 apiece in a secondary offering.

Analyst actions

American Express

(AXP) - Get Report

slipped 1 9/16 to 121 5/16 even after

Prudential Securities

began coverage with an accumulate.

Citigroup

(C) - Get Report

dwindled 2 1/2 to 61 1/8 even after

Raymond James

raised it to accumulate from underperform following a meeting with company executives in New York. The firm also increased its first-quarter earnings estimate for Citigroup to 84 cents from 76 cents a share and its 1999 view to $3.60 from $3.20.

Computer Network Technology

(CMNT)

flew 1 11/16, or 15.5%, to 12 11/16 after

Bear Stearns

initiated coverage at buy.

Egghead.com

(EGGS)

advanced 1 15/16, or 10.6%, to 20 1/4 after Prudential started coverage at strong buy.

Miscellany

Nike

(NKE) - Get Report

skidded 2 1/8 to 56 3/4 on word it's increasing entry-level cash wages for its Indonesian footwear factory workers to 265,000 rupiah (about $30) a month from 250,000, effective April 1.