The CNET tech index lost 208.64, or 7 percent, to close at 2,696.53, putting an exclamation point on a sell-off that has dragged on for several weeks. Of the 98 stocks tracked by the index, all but two fell: eBay and Voicestream Wireless.
Of the 18 sectors tracked, Internet service companies posted the ugliest losses, falling 13 percent. Server software companies followed, plunging 11 percent.
Semiconductor makers and semiconductor equipment companies also posted large losses, dropping about 10 percent each. Server hardware makers escaped relatively unscathed, losing 2 percent.
Intel lost $10.63 and closed at $110.50, while Microsoft fell $5.13 to $74.13. Microsoft set a new 52-week intraday low, trading as low as $73.25.
E-commerce company Peapod had a bizarre trading day. After falling to a 52-week intraday low of $2, the stock posted the largest percentage gain on the Nasdaq, rising 69 cents, or 27 percent, to $3.19.