Layoffs from Cisco and a warning from Ericsson compounded the Nasdaq's troubles at midday Monday as the tech-laden index sunk below 2,000. The Nasdaq shed 98.85 points to 1,953.93, and the Dow Jones industrial average fell 224.50 points to 1,0420.12.
The Inter@ctive Week @Net Index fell 11 points to 184.33.
The Nasdaq dipped below a critical psychological point Monday. After bounding to an all-time high of 5,048.62 a year ago, the Nasdaq has lost more than half of its gains. The last time the index was under the 2,000 mark was Dec. 16, 1998.
News that Cisco will cut jobs added to the Nasdaq's drop. The report was taken as a sign that things are much worse than anyone had expected--in the United States and overseas.
Analysts slashed their targets on Cisco and said the stock's "U" may deepen yet. Shares fell $1.94 to $18.69. Among competitors, Redback Networks (Nasdaq: RBAK) fell $1.93 to $17.57, and Juniper (Nasdaq: JNPR) dropped $4.63 to $50.25. Jabil Circuit (NYSE: JBL), for whom Cisco is a large customer, was also off $2.11 to $ 21.39, as analysts expected bad news from the company's upcoming quarter.
A warning from Swedish telecom equipment maker Ericsson (Nasdaq: ERICY) sent the its shares plunging 21 percent--down $1.66 to $6.72. It also knocked a few competitors' stock prices, confirming worries about a slowdown in that sector. Motorola (NYSE: MOT) fell 60 cents to $14.95 and Nokia dropped $1.14 to $21.66.
Citing "dismal economic conditions," flash memory maker Silicon Storage Technology (Nasdaq: SSTI), down $1.66 to $8.84, also warned it would miss revenue and earnings estimates for the quarter.
Shares in Ciena (Nasdaq: CIEN) tumbled $11.31 to $53.81 as the fiber-optic systems supplier suffered from renewed signs of slumping demand in the sector.
Amazon.com (Nasdaq: AMZN) slipped $1.56 to $10.69, AOL Time Warner (NYSE: AOL) fell $3.08 to $39.79 and Yahoo (Nasdaq: YHOO) dropped 75 cents to $16.25.
Intel (Nasdaq: INTC) dipped $1.31 to $28.13, Oracle (Nasdaq: ORCL) fell 81 cents to $15.56 and Microsoft (Nasdaq: MSFT) was off $3.88 to $52.81.
ZDII staff and Reuters contributed to this roundup.