Technology and blue-chip stocks took a beating Monday as investors pulled their money out of stocks and gobbled up bonds. The Nasdaq composite fell 139 points to 4,096.26 while the Dow Jones industrial average closed off 244 points to 11,008.17.
"Stocks are bumping up against the valuation ceiling and people are wondering where the earnings are going to come from'' in a market defined by rising interest rates, said A.C. Moore, the chief investment strategist at Dunvegan Associates.
Intel Corp. (INTC) closed up 7/8 to 98 13/16 after moving as high as 104 7/8. Advanced Micro Devices Inc. (AMD) pulled back 3 3/4 to 34 1/8 and International Business Machines Corp. (IBM) lost 3 7/16 to 118 1/16.
Britain's EMI Group and Time Warner Inc (NYSE: TWX) said on Monday they were merging their music businesses to create the world's top record company, worth $20 billion, with a powerful presence on the Internet. Time Warner shares closed off 3 1/2 to 87 5/8.
AOL (NYSE: AOL), which recently bought Time Warner, fell 2 3/4 to 62. Yahoo! (Nasdaq: YHOO) plunged 26 11/16 to 325 1/4 and Lycos Inc. (LCOS) shed 7 3/4 to 72 13/16.
Amazon.com Inc. (AMZN) jumped 8 1/16 to 70 1/8 after a Goldman Sachs upgrade and news of two deals. Amazon boosted its stake in Drugstore.com (Nasdaq: DSCM) and invested in Greenlight.com.
NBC Internet (Nasdaq: NBCI) dipped 9/16 to 81 15/16 after it said fourth quarter pro forma revenue would be about $27.3 million, up 38 percent from the third quarter. The company didn't give bottom line projections.
Excite@Home Corp. (ATHM) lost 2 to 38 1/4 and eBay Inc. (EBAY) dropped 14 1/8 to 136 3/8 ahead of Tuesday's earnings report.
Healtheon/WebMD Corp. (Nasdaq: HLTH) moved up 5 9/16 to 65 1/8 after it said it will buy the electronic data interchange unit of Quintiles Transnational Corp, in a deal valued at $2.5 billion.
Neoforma.com (Nasdaq: NEOF) shot up 39 3/8 to 52 3/8 after the business-to-business company for the medical supplies industry priced 7 million shares at $13 each.
Among widely held PC stocks, Dell Computer Corp. (DELL) chopped off 2 3/16 to 41 9/16; Compaq Computer Corp. (CPQ) rose 1 5/16 to 32 9/16; Gateway Inc. (GTW) shed 2 1/8 to 59 7/8 and Apple Computer Inc. (AAPL) closed off 5 1/16 to 106 1/4.
After warning that fourth quarter earnings would be at the low end of expectations, computer printer maker Lexmark International Group Inc. (NYSE: LXK) marched up 12 1/64 to 92 1/2 after its fourth-quarter profits beat estimates by a nickel.
Siliconix (Nasdaq: SILI) jumped 56 3/4 to 220 1/2 Monday after it announced its fourth quarter results.
Microsoft Corp. (MSFT) lost 2 1/2 to 101 1/4 while Oracle Corp. (ORCL) and Sun Microsystems Inc. (SUNW) closed off 5 1/2 and 5 5/16 a share, respectively.