The Nasdaq composite index rose more than 60 points early today but then ran for cover, finishing down 46.84 at 3,849.51. The Standard & Poor's 500 index dropped 5.86 to 1,481.99.
The Dow Jones industrial average rose 37.74 to close at 11,233.23, led by J.P. Morgan, which jumped $15.69, or 9 percent, to close at $185.
Large-cap tech companies did little to prevent the slide.
At the end of regular trading, Intel closed up 25 cents at $64.94. Microsoft dropped 69 cents to $68.13. Cisco Systems was the most active, sliding $2.31 to $58.88 on a volume of more than 76 million shares. Oracle fell $4.06 to $79.38, and Sun Microsystems dipped 94 cents to $114.31.
"It just doesn't seem like the Nasdaq can sustain any momentum," said Kathy Taylor, a trader at A.G. Edwards. "Things looked good this morning, and now we're seeing some stocks that are down big time?It's not a pretty sight."
Numerous factors may be converging to cause the Nasdaq slump. Some blame it on fears about upcoming quarterly earnings reports, which are expected in late September. Several companies have issued earnings warnings in recent days, making investors cautious that more are on their way.
Others blame the decline on decelerating revenue growth rates. Although total revenues at large tech companies continue to grow, many are struggling or failing to maintain the hyper-growth rates of last year and earlier this year.
"My sense is that the market is interested in everything negative and is looking for something to worry about," said Philip Dow, a market strategist at Dain Rauscher Wessels, who maintains his belief that solid tech companies with good earnings will weather the storm.
The CNET tech index lost 45.19 to close at 3,060.47. Losers edged out winners, with 63 of the 97 stocks in the index falling, 31 rising and three remaining unchanged.
Of the 18 sectors tracked by CNET Investor, telecom equipment and semiconductor equipment companies posted the sharpest drops, falling nearly 5 percent and 4 percent, respectively. Wireless companies were the day's largest gainers, climbing a slim 1 percent.
Negative earnings pre-announcements jolted shares of PRI. A raft of analysts downgraded the stock today, cutting one-year price targets and generally sapping enthusiasm for the semiconductor equipment maker.
PRI Automation dove $16.81, or 39 percent, to $25.88 on a volume of 23.7 million shares, more than 56 times the stock's average daily volume of about 423,000 shares. The stock also set a new 52-week low at $23.88 compared to its high of $94.50.
The maker of chip equipment said it expects to miss forecasts for the fourth quarter, which ends this month. Profit will be slightly above break-even, the company said, compared with analyst forecasts for 52 cents a share, the average in a poll by First Call/Thomson Financial.
Other chip stocks had a volatile day as well. The Philadelphia semiconductor index rose about 12 points at the beginning of the day then violently dropped 41.32, or 4 percent, to 988.95 over the last two hours of trading.
Chip equipment maker KLA-Tencor led the slide, falling $4 to $50.19. Teradyne lost $3.94 to close at $53.25, and National Semiconductor fell $3 to $43.75.
NetCreations fell $8.88, or about 43 percent, to $12 on a volume of 2.4 million shares, nearly 19 times more than the stock's daily average of about 127,000. The stock earned the title of largest percentage loser on the Nasdaq, and hit a new 52-week low of $11.69, compared to a high of $69.75.
The seller of e-mail marketing services said third-quarter revenue will miss company estimates because customers cut advertising spending.
Among members of the CNET tech index, Inktomi and JDS Uniphase posted losses. Inktomi fell $7.44 to $111, and JDS dropped $6.56 to $103.19.
Shares of DoubleClick successfully swam against the downward tide. The Internet advertising company gained $4.06, or 12 percent, to close at $37.81.