Updated from 4:09 p.m. EST

Sellers leaned into the Nasdaq Monday, sending it sharply lower in thin volume as investors got jittery about some postclose earnings news. Blue-chips also fell.

The Nasdaq Composite closed down 38.85 points, or 1.9%, to 2008.78; the Dow lost 66.07 points, or 0.6%, to 10529.48; and the S&P 500 fell 9.66 points, or 0.8%, to 1147.20.

Volume on the New York Stock Exchange was over 1.2 billion shares, and advancers outnumbered decliners by 2 to 1. Over 2 billion shares changed hands on the Nasdaq, where decliners outnumbered advancers 2 to 1.

After bouncing around all morning, tech investors started unloading just after midday, with an upcoming midquarter update from Texas Instruments ( TXN) the only visible catalyst. The Philadelphia Semiconductor Index fell 3.7%, with Intel ( INTC) off about 4.2% following Thursday night's lukewarm guidance. Dell ( DELL), Sun ( SUNW) and Microsoft ( MSFT) were also lower.

Arthur Hogan, a chief market analyst at Jefferies, said the weakness in tech stems from Intel's lackluster midquarter update last Thursday, which has made investors leery about the Texas Instruments report.

"Folks are calling into question just how much IT spending has picked up and how much valuations have gotten ahead of themselves," he said. "Clearly, we're seeing a lot of that cycling out of tech and into some of those sleepy, S&P 500 type of names, and I think we've seen that trend developing lately."

After the bell, Texas Instruments said first-quarter revenue would be at or above existing estimates of $2.85 billion. The forecast effectively eliminated the lower half of a previously disclosed range.

Outside of tech stocks, a lack of news catalysts left traders groping for direction. "This is an environment where it's really hard to make a decision one way or the other," said John Hughes, an equity strategist at Shields & Co. "It's almost like every day you're watching, looking for a tip-off. Everyone was waiting for Friday, but Friday did nothing but cloud the picture further.

"There's still a lot of indecision and uncertainty out there, and when it's like that, I think it's a prudent thing to be more cautious."

Overseas, London's FTSE rose 0.1% at 4554, and Germany's Xetra DAX gained 0.5% at 4146. In Asia, Japan's Nikkei closed down 0.3% to 11,503, while the Hang Seng in Hong Kong gained almost 1% at 13,574.

In currency trading, the dollar lost ground against the yen, recently buying 111.16 yen in New York compared with 112.07 at Friday's close. Meanwhile, the euro gained against the dollar, buying $1.2408 compared with Friday's $1.2376.

The 10-year Treasury note traded up 20/32 to yield 3.77%, its lowest level since mid-July. Gold prices were flat, while crude oil was lower.

On Friday, the government said the economy created just 21,000 jobs in February, about 100,000 fewer than economists had hoped. Trading has been choppy since the number hit as traders tried to decide if the number was bullish because of its impact on rate policy or bearish because of its consumer implications.

In corporate news, Berkshire Hathaway ( BRKa) Saturday published its annual letter to stockholders, a document renowned for its market-moving influence. The company, run by billionaire investor Warren Buffett, reported that it nearly doubled profits in 2003, thanks to rising premiums in its insurance business coupled with foreign currency changes and profitable junk bond investments.

Despite Berkshire's recent success, Buffett told investors that both stocks and bonds are generally overvalued at today's prices, and he said that the company's future performance "will fall far short of what it has been in the past." The company's stock closed up 1% to $94,000.00.

Caterpillar ( CAT) closed up 0.89% at $77.05 after Prudential upgraded the construction equipment maker to "neutral weight" from "underweight."

Eastman Kodak ( EK) said its acquisition of Nexpress Solutions and Heidelberger's Heidelberger Digital LLC will reduce earnings in 2004. Kodak lowered its 2004 earnings estimate to $2.05 to $2.35 a share from $2.25 to $2.55 a share. Analysts surveyed by Thomson One Analytics were forecasting full-year earnings of $2.32 a share. Kodak's shares closed down 3.3% at $26.88.

J.M. Smucker ( SJM) said it will buy International Multifoods ( IMC) for about $500 million to add an array of well-known consumer food brands to its lineup of products. Shares of J.M. Smucker closed down 4.9% to $49.40, while International Foods soared 25.7% to $24.68.

Also, traders were watching shares of Martha Stewart Living Omnimedia ( MSO), closing down 9.3% at $9.85, after its founder was found guilty on Friday of all counts in her criminal trial. The stock dropped about 24% when it reopened on the NYSE on Friday afternoon after spiking before the verdict was returned. Shares of Kmart ( KMRT), Martha Stewart's retail partner, fell more than 1% on Friday. They closed Monday up 1.3% at $32.95.

On Tuesday, Albertson's ( ABS) is expected to report 20 cents per share in fourth-quarter earnings, compared to 52 cents per share in the same quarter last year, according to an analyst poll from Thomson One Analytics. Interpublic ( IPG) is expected to report 12 cents per share in fourth quarter earnings, compared to last year's 18 cents a share, and Kroger ( KR) will report fourth- quarter earnings, forecasted to be 22 cents a share. Last year, the grocery store chain earned 49 cents per share.

No major economic news is scheduled for release.