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Market Update: Nasdaq, Dow End Dreadful Session Near Day's Lows

<LI>SOX ends up-and-down day lower.</LI><LI>Boxmakers down.</LI> <LI>All that glitters is gold.</LI>
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The market's rate of bleeding looked like it was going to slow, but late in the afternoon, a new vein was nicked and the plasma flew out of this market like that scene in Taxi Driver.

You remember the one. Gross.

Markets throbbed and gushed red from the get-go this morning, while technology stocks spurted value on those lingering and sinister fears about a business slowdown. Nothing was safe. Anemic volume and kept hopes for a rally far from Wall Street. No matter the exchange, no matter the industry, the number of stocks with losses handily topped those few lucky enough to have gains.


Dow Jones Industrial Average ended down about 167 points as a decided number of its 30 components sat with losses. Coca-Cola was one of the worst, adding a weighted 29 to the Dow's down side after the news broke that it was in talks to purchase

Quaker Oats


for $15 billion. Nobody seemed to be very excited about the acquisition, least of which was

Salomon Smith Barney

, which cut the company to outperform from buy and lowered its price target to $65 from $68.

A funk in financials also helped crush the blue-chips.

J.P. Morgan

(JPM) - Get JP Morgan Chase & Co. Report



(C) - Get Citigroup Inc. Report

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American Express

(AXP) - Get American Express Company Report

added a combined 57 points to the Dow's redness, making a bad day even worse.

Over on the

Nasdaq Composite Index, the picture was no better. The Comp ended off 152 to 2876 -- the first time in more than a year that the tech-heavy index had ended below 2900.

Dot-Bombs and Tech Wrecks

Analyst downgrades stroked an already raging fire. This morning,

Morgan Stanley Dean Witter

downgraded a

whole bunch of networking favorites, including


(CSCO) - Get Cisco Systems Inc. Report


Juniper Networks

(JNPR) - Get Juniper Networks Inc. Report


Lehman Brothers



(EBAY) - Get eBay Inc. Report

. And then, just after lunchtime in New York City,

Wit Soundview

cut its ratings on PC-makers, hitting


(AAPL) - Get Apple Inc. Report



(DELL) - Get Dell Technologies Inc. Class C Report





The downgrades knocked the wind out of the entire industry, pushing out any possible bargain buyers after a particularly rocky earnings season. The post-earnings, pre-holiday mood has been grim since most companies warned before releasing third-quarter earnings, guiding analyst estimates lower, and then producing unspectacular earnings in line with those diminished expectations. And to make matters worse, a handful of poor future forecasts have cast a long shadow over the economic outlook for the industry. Just look at the once-triumphant dot-com stocks.

After the eBay rating cut and fears of another post-holiday washout on the heels of high-profile closings from


, Internet Sector Index

was off 7.1%. After the Wit Soundview moves, the

Philadelphia Stock Exchange Computer Box Maker Index

dropped 2.8%. The

Philadelphia Stock Exchange Semiconductor Index

was off 1.4%.

Sector Watch

Isn't it amazing how the word "again" can change the meaning of a sentence?

Take the sentence: "Technology got killed. Again."

Sad but true. Those once red-hot tech names were stone cold as investors were staying wary of stocks now seen as risky. The spark that lit today's wildfire selloff was a broad downgrade by the folks at Morgan Stanley Dean Witter. The analyst downgraded a

handful of networkers , slashing Cisco's price target to $75 from $90 and dropping both

Juniper Networks

(JNPR) - Get Juniper Networks Inc. Report


Redback Networks


to outperform from strong buy.

As a result, a wide variety of tech names have dropped, because networkers transact business with so many different kinds of tech names, such as semiconductors that provide chips.

Once upon a time, there was an industry known as biotechnology, "biotech" for short. And these biotech stocks were quite popular, doubling and tripling and quadrupling in value in a mere two years. But in the past three weeks, that fairy tale has become a nightmare. The

American Stock Exchange Biotechnology Index

has dropped more than 25% over that span, falling from near record highs.

Today, biotechs got killed. Again. The AMEX Biotechnology Index was off 7.4%.

If you're looking for winners -- try gold. The

Philadelphia Stock Exchange Gold & Silver Index

rose 0.8%.

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On Friday, those bonds sold off a bunch, the first long-maturity dip in five trading days. Today, the bonds were back in town, tracking higher, thanks to a call from

Lehman Brothers'

influential chief equity analyst Jeffrey Applegate, who adjusted his investment allocation strategy. He now recommends taking cash and putting it into bonds. Applegate's strategy calls for investors to hold 80% of their portfolio in stock and 20% in bonds.

The benchmark 10-year

Treasury note was lately flat at 100 18/32, yielding 5.673%.

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