SAN FRANCISCO -- All together now. Freed from having to ponder the meaning of last week's divergences, traders faced a whole new set of worries today.
Major averages declined precipitously in unison despite
early indications suggesting a positive session. At
midday, a repeat of last week's trend seemed likely, as small-cap and tech proxies fought to sustain early gains while blue-chip averages faltered. But by 2:30 p.m. EST, all major averages had fallen into negative territory and the losses were not stemmed until about 20 minutes remained in the session.
Once as high as 11,366.50, the
Dow Jones Industrial Average
traded as low as 10,917.27 before closing down 243.54, or 2.2%, to 11,008.17. The decline is the Dow's fifth in a row and its 10th-largest point loss ever (the percentage drop was not historically significant). The index has fallen 6.1% from its record close of 11,722.98, set
slid 39.83, or 2.8%, to 1401.53 after trading as high as 1454.09 and as low as 1395.42.
Nasdaq Composite Index
, meanwhile, closed off 139.32, or 3.3%, to 4096.08 after trading as high as 4303.15. The decline -- the third-biggest point loss in the average's history -- came amid the heaviest over-the-counter trading volume ever, at 1.989 billion shares.
The tech-imbued average was waylaid by weakness in bellwethers such as
Additionally, recent tech leaders such as
suffered big drops. The
bucked the trend, rising 0.8% after
made bullish comments. Still, the
Philadelphia Stock Exchange Semiconductor Index
TheStreet.com Internet Sector
index fell 34.53, or 3%, to 1127.77 despite a 13.3% rise in
, which received bullish comments from
Donaldson Lufkin & Jenrette
. Separately, Amazon announced it has boosted its minority stake in
, which surged 19%.
helped sabotage the DOT, which traded as high as 1191.74.
TheStreet.com New Tech 30
plummeted 92.65, or 13.9%, to 575.80. Unveiled Jan. 5, the TSC New Tech 30 is an expanded index replacing the
index. The market-cap-weighted index remains focused on tracking the most scorching part of the market, the magnet for Wall Street's hot money. A list of the index components is available at
'There's no major portion of the market portfolio managers can put their money in and feel comfortable about,' said Ed Nicoski of
U.S. Bancorp Piper Jaffray
. 'There just isn't any leadership except tech, and that can only go so far without breaking or causing the rest of the market to take a break.'
got caught in the downdraft, falling 10.99, or 2.1%, to 522.95, ending its streak of record-setting closes at five.
"The market did have a decent tone
earlier but there was heavier profit-taking than people thought we'd see," said Jim Volk, co-director of institutional trading at
in Portland. "People were running to the hills on stuff previously parabolic."
For example, the trader noted
-- a huge winner last week -- declined 35% to 79 1/2 after trading as high as 139 intraday.
But "this doesn't seal the end of the bull market," Volk continued. "I keep reminding myself the violence is compressed. It could be we completed a week's worth of selloff in a day. I still maintain it's a midcourse correction and not the beginning of a top."
New York Stock Exchange
trading, 1.116 billion shares were exchanged while declining bested advancers 2,029 to 1,028. In
Nasdaq Stock Market
action losers led 2,399 to 1,802 on the record-setting volume mentioned above. New 52-week lows bested new highs 156 to 93 on the Big Board while new highs led 449 to 95 in over-the-counter trading.
"There's no major portion of the market portfolio managers can put their money in and feel comfortable about," said Ed Nicoski, chief market strategist at
U.S. Bancorp Piper Jaffray
in Minneapolis. "There just isn't any leadership except tech, and that can only go so far without breaking or causing the rest of the market to take a break."
Nicoski cautioned against overanalyzing today's decline but said the market has a "huge problem" and "a lot of vulnerability built in." Given the "parabolic" moves enjoyed by tech and biotech of late, "at some point they're going to get hurt real bad and harder than the rest of the market," he said. "I don't know if today's the day" that begins the process.
The conundrum, Nicoski explained, is that technology still represents "long-term leadership" and a sector investors should continue to overweight. But investors should also have some cash on hand for what is shaping up to be an extremely volatile year, he said.
Market players were unable to pin the decline on any particular event but the drug industry embodied both the session's overriding negativity and sense of missed opportunity.
Procter & Gamble
said it had
broken off merger talks with
American Home Products
. P&G, which plummeted last week on rumors of such a combination, rose as high as 108 7/8 before closing up fractionally at 103 1/8, while Warner Lambert lost 4.6% and American Home dumped 11.2%.
Elsewhere, Dow component
Johnson & Johnson
shed 6.8% while
slid 4.1% despite posting better-than-expected earnings. The
American Stock Exchange Pharmaceutical Index
Financial stocks also stumbled although the price of the 30-year Treasury bond rose 22/32 to 93 8/32, its yield dipping to 6.65%. The
Philadelphia Stock Exchange/KBW Bank Index
fell 4.1%; the conglomerate said it was "fully reserved" against fourth-quarter losses suffered by its reinsurance unit.
Among other indices, the
Dow Jones Transportation Average
slid 48.54, or 1.8%, to 2702.95; the
Dow Jones Utility Average
dipped 2.83, or 0.9%, to 312.26; and the
American Stock Exchange Composite Index
fell 6.79, or 0.7%, to 905.49.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
lost 176.16, or 2%, to 8458.75 and the
Mexican Stock Exchange IPC Index
dropped 35.43, or 0.5%, to 6855.35.
For coverage of today's top stocks in the news, see the Company Report, published separately