SAN FRANCISCO -- It's probably too early to panic. And with the Nasdaq still up around 7.5% this year, it is only natural that investors are taking profits. But the high-tech sector is no longer on a one-way path higher, and more choppy times are expected ahead.
"It's the start of a more significant correction than we've seen since the October lows," said Dick Dickson, technical analyst with
Scott and Stringfellow
. "It really looks as though we're seeing a correction, but not a major reversal."
According to Dickson, as long as the Nasdaq holds at 2000, the sector should be fine. The Nasdaq was down 56.25 at 2353.8 around midsession.
"It's not the end of the game," Dickson said. "It will take more than one dip to change the psychology that people have in tech stocks."
Dickson said Internet stocks that have enjoyed such a huge run-up may be in for a worse time.
"Internet stocks will be uglier, but is it crash-and-burn time? No, I don't think we've reached that point yet," he said.
Many of the stocks most affected by today's selloff have been those that were seeing some of the largest gains of late. Stock in
was down another 18 points at 221 and has now lost close to 100 points since reaching 314 on Jan. 7. The decline coincides with the lifting of the lockup period on the stock last Friday, allowing insiders to sell shares of the stock.
, which has caught the fancy of the Internet crowd during the past two weeks, was down 16 15/16 at 121. The stock reached a high of 154 3/4 on Wednesday, but was trading around 75 late in January.
Online Brokers Cool Off
Online brokerages are giving back a portion of the gains they have made over the past week as traders book profits. Note that short-covering contributed to gains in many of these companies as their stock floats are extremely small.
was down 14 7/87 at 95 7/8 around midsession, and was down roughly 40 points from its high of 135 made Wednesday.
was down 4 7/8, or 30%, at 11 after spiking to a high of 25 3/4 on Wednesday. It was trading in the 4s as recently as Tuesday.
Siebert Financial Group
has fallen hard after reaching a high of 70 5/8 Thursday. It was trading 7 3/8 lower at 35 7/8, still around three times more than its 12 1/2 low from Monday. And
, which experienced site problems for most of the week including today, according to
, was down 7 3/8 at 46 1/8.
It wouldn't be Friday without a hot IPO. Last week,
was king of the IPOs by going from 18 when it was priced last week to 86 1/4 on Monday. Today,
, an Internet-service provider, was priced at 17 and opened at 88, which has been its high for the day. It was recently trading up 30 at 47. As for Tut Systems, it was recently trading 2 3/8 lower at 56.