SAN FRANCISCO -- Tech stocks endured a sharp selloff, with the Nasdaq surrendering 135 points in its second-worst point decline ever and several recent leaders taking 20% hits.
A pair of recent highfliers,
, were among the hardest hit, dropping 30% and 20%, respectively. Each online brokerage firm's stock had more than doubled this year ahead of the action.
Dawn Simon, software analyst with
Brown Brothers Harriman
, said there was some panic selling in a number of Internet stocks, but she still sees the losses as more of a correction from an overvalued position, which is not necessarily a bad thing.
"If it continues through the rest of the week and next week, then I think it's a selloff," Simon said. "But if it's just one day, it's a healthy correction."
Simon said it's going to take a couple of strong earnings reports or other positive news to right the market. There are some key companies slated to report earnings this week, including
on Tuesday. Simon also is looking ahead to next week when both AOL and
will report earnings.
A solid earnings report has not helped Ameritrade, which Monday dropped 38 1/8, or 30%, to 87 7/8.
closed down 18 3/4, or 20%, at 73 13/16.
Losses of 20% or more were not uncommon. Among some of the big names,
closed down 41 7/8, or 25%, at 128 5/8. The largest point loser on the Nasdaq was
, down 46 7/8, or 18%, at 214.
closed down 34 13/16, or 20%, at 139 7/8;
closed off 34 3/8, or 24%, at 110;
closed down 33 9/16, or 24%, at 104 1/2; and
closed down 34, or 28%, at 79 5/16. One of the biggest percentage losers was
, which closed down 14 3/8, or 32%, at 30 3/8.
The day was expected to get off to a positive start following a reshuffling of management by
. But the reception to the changes was lukewarm, and Compaq, along with other boxmakers, fell with the rest of the sector as the day went on. Compaq finished down 7/8, or 4%, at 22 3/4.
was not spared, closing down 2 13/16, or 7%, at 35 7/16, while
was off 4 11/16, or 7%, at 59 1/2.
New Place to Bid on Bid.com
received approval Monday from the Nasdaq to trade in the U.S. The Toronto-based Internet auction house's shares will begin trading on the Nasdaq on Tuesday, under the ticker BIDS. The company's remaining shares will continue trading on the
Toronto Stock Exchange
"It gives them a heightened level of notoriety," said one hedge fund manager who used to be long
. "Many people who are online traders are novices, and they probably wouldn't know how to buy a Toronto stock."
The lack of a U.S. listing has not held the company's stock back from taking part in the robust gains that some Nasdaq-listed Internet companies have experienced. Bid.com's stock has climbed more than 500% in Toronto since Jan. 1.
The Nasdaq is the place to trade Internet stocks, the hedge fund manager said, "although today it's not a positive," he concluded.