A raft of better-than-expected quarterly results couldn't stop technology stocks from leading a broad market retreat Tuesday.
The tech-heavy Nasdaq Composite Index slid 98.11 to 2,732.18, the S&P 500 dropped 30.55 to 1,377.10, and the @100 Index fell 147.05 to 5,144.89. The Dow Jones Industrial Average went down 191.55 to 10,996.13.
The selloff came questions emerged about whether companies could continue to meet the higher hopes of investors, although blue chips for the most part reported expectation-topping results.
"We have run up the market in anticipation," said Larry Rice, chief investment officer at Josephthal & Co. "Usually, when the news comes out people sell."
International Business Machines Corp. (NYSE: IBM) tumbled 6 to 128 5/8, the sharpest decline in the blue chip Dow, a day after its earnings edged above analysts' estimates. Microsoft Corp. (Nasdaq: MSFT) fell 5 1/16 to 93 5/16, following earnings which surprised estimates but warned of future slow-downs.
Lucent Technologies Inc. (NYSE: LU), down 6 53/64 to 70 hurdled Wall Street estimates Tuesday with third quarter earnings of $829 million, or 26 cents a share. Texas Instruments (NYSE: TXN) fell 8 15/16 to 141, despite cruising past Wall Street's expectations Tuesday and an upbeat outlook on semiconductor sales in upcoming quarters.
Other analysts noted that despite the market's steady decline over the course of the session, they did not yet see signs a major break was imminent, pointing to relatively moderate volume of some 616 million shares as evidence selling pressure was contained.
"So far, volume today is average, nothing great," said Peter Green, chief technical strategist for Gruntal & Co. "It's what you would expect in the summer."
Gadzoox Networks (Nasdaq: ZOOX) shot up 53 13/16 to 74 13/16. Other IPOs today were Talk City Inc. (Nasdaq: TCTY), rising 1 11/16 to 13 11/16, Convergent Communications Inc.'s (Nasdaq: CONV) up 6 1/2 to 21 1/2, and Engage Technologies (Nasdaq: ENGA), which gaining 26 to 41.
Diamond Multimedia Systems Inc (Nasdaq: DIMD) picked up 19/32 to 5 25/32 on news MTV Networks Online, a division of Viacom, has signed a deal with it to deliver digital music over the Internet. Diamond has a pending deal to be acquired by S3 Inc. (Nasdaq: SIII), whose shares moved up 1/4 to 11 13/16.
Network security software vendor ISS Group, Inc. (Nasdaq: ISSX) retreated X to X on concerns that the company could justify its high stock valuation. Goldman Sachs removed the ISS from its recommended list and downgraded the stock to "market outperform."
DLJdirect (Nasdaq: DIR) , up 1 3/8 to 26 1/4, easily topped estimates with a second quarter profit of 5 cents a share. NetB@nk, (Nasdaq: NTBK), down 3 11/16 to 27 1/16, however, missed estimates with a profit of 3 cents a share.
Among PC makers, Gateway Inc. (NYSE: GTW) fell 2 5/8 to 67 3/8, Dell Computer Corp. (Nasdaq: DELL) dropped 1 5/16 to 41 1/8, and Compaq Computer Corp. (NYSE: CPQ) fell 3/4 to 25 3/4. Apple Computer Inc. (Nasdaq: AAPL) also moved down, 1 9/16 to 52 7/8.
Intel Corp. (Nasdaq: INTC) dropped 2 5/8 to 64 15/16 while Advanced Micro Devices Inc. (NYSE: AMD) sunk 9/16 to 16 3/4.
Cisco Systems Inc. (Nasdaq: CSCO) shed 2 11/16 to 62 1/4. 3Com Corp. (Nasdaq: COMS) dropped 9/16 to 26 7/8.
Some stocks fell ahead of quarterly reports scheduled for release after market close, including Infoseek Corp. (Nasdaq: SEEK), down 11/16 to 40, Excite@Home (Nasdaq: ATHM), dropping 1 11/16 to 45 1/16 and RealNetworks Inc. (Nasdaq: RNWK), sliding 5 11/16 to 77 13/16. Also sliding were Siebel Systems Inc. (Nasdaq: SEBL), down 5 1/16 to 58 7/16; Computer Associates International Inc. (NYSE: CA), lower 2 3/8 to 52 15/16; and PeopleSoft Inc. (Nasdaq: PSFT), down 1 to 14 1/2.
-- Reuters contributed to this report.>