"Earnings have come in weak and it seems like investors are losing confidence that Corporate America is going to pull us out of this slowdown," said John Forellia, senior vice president at Independence Investment Associates. "They are focusing more on the consumer doing it now."
Intel shares fell $2.88 to $31.50 after announcing it will delay raises and curb new hires this year in an effort to reduce expenses. The chipmaker was one of several stocks that took a beating Tuesday after Salomon Smith Barney analyst Jonathan Joseph sounded a dour note on the outlook for the sector.
Advanced Micro Devices lost $2.11 to $22.60. IBM fell $3.50 to $111.50, while Micron Electronics and Applied Micro Circuits fell $3.95 and $5.33 a share, respectively.
Among widely held PC stocks, Dell closed off $1.50 to $22, Gateway lost $1.49 to $18.06, Compaq trimmed 40 cents to $21.40 and Apple Computer clipped 69 cents to $18.31.
Microsoft dropped $1.44 to $55.88. Oracle chopped off 88 cents to $23.13, and Sun Microsystems finished down 94 cents to $22.25.
Shares of Breakaway Solutions gained 3 cents to $1.16 after the company announced $33 million in equity financing from strategic investors
Portal Software tacked on 75 cents to $9.94 on news that Vodafone UK will use its Infranet software, a real-time program for billing and customer management. Analysts said the deal validates Portal Software's technology and should boost revenue.
Yahoo fell $1.63 to $26.56. America Online Time Warner tumbled $3.41 to $44.95, while Amazon.com and eBay finished off $1.19 and $4.19 a share, respectively. CMGI dipped 31 cents to $4.28.
Cisco Systems sawed off $2.19 to $26.06. Nortel Networks fell $1.13 to $18.87 and Lucent Technologies closed off 33 cents to $12.34.