Blue-chip and technology stocks were pounded Monday as the Nasdaq composite plunged 129 points, or 6 percent, to 1,924.15, knocking the tech-laden index below 2,000 points for the first time since December 1998.
The Dow Jones industrial average tumbled 436 points, or 4 percent, to 10,208.25 as investors chose to take whatever profits they'd amassed in the blue chips and run.
After breaking through the 5,000-point threshold in March 2000, the Nasdaq composite has lost more than 60 percent of its value in the past year.
"Investor sentiment is extremely negative right now. In the immediate future there is nothing but grim news ahead as earnings revisions downward continue," said Peter Anderson, chief investment officer at American Express Financial Advisors.
Cisco Systems (Nasdaq: CSCO) added to that negative vibe Monday when its shares fell $1.81 to $18.81 after warning that the economic slowdown could last more than the six months it previously forecast. It announced on Friday that it would eliminate as many as 8,000 jobs.
Other network-equipment stocks lost ground Monday as Nortel Networks (NYSE: NT) and Lucent Technologies (NYSE: LU) shed $1.25 and 82 cents a share, respectively. Redback Networks (Nasdaq: RBAK) dropped $1.78 to $17.72, and Juniper Networks (Nasdaq: JNPR) closed off $5.19 to $49.69.
A warning from Swedish telecom equipment maker Ericsson (Nasdaq: ERICY) sent its shares south, falling $2.09 to $6.28. Competitors Nokia (NYSE: NOK) and Motorola (NYSE: MOT) lost $1.35 and 55 cents a share, respectively.
Microsoft (Nasdaq: MSFT) fell $4.75 to $51.94. Oracle (Nasdaq: ORCL), which reports its third-quarter results later this week, slid $1.13 to $15.25, and Sun Microsystems (Nasdaq: SUNW) ended off 38 cents to $17.06.
Citing "dismal economic conditions," flash memory maker Silicon Storage Technology (Nasdaq: SSTI) also warned it would miss revenue and earnings estimates for the quarter. The stock closed down $1.19 to $9.31.
Intel (Nasdaq: INTC) clipped $1.69 to $27.75. Advanced Micro Devices (NYSE: AMD) sawed off 57 cents to $22.73, and IBM (NYSE: IBM) closed off $3.80 to $95.49.
Shares in Ciena (Nasdaq: CIEN) tumbled $11.81 to $53.31 as the fiber-optic systems supplier suffered from renewed signs of slumping demand in the sector.
Among widely held PC stocks, Dell (Nasdaq: DELL) lost $1.31 to $22.06, Compaq (NYSE: CPQ) trimmed 55 cents to $17.95, Gateway (NYSE: GTW) shed 69 cents to $15.16 and Apple Computer (Nasdaq: AAPL) closed off $1.75 to $18.50.
ZDII staff and Reuters contributed to this roundup.