Troubles ignited by the technology sector got the better of old economy stocks at midday. The Dow Jones industrial average took a hit, falling over 3 percent, or 326.48 to 9,160.52. The Nasdaq fared well by comparison, dropping 33.96 to 1,796.27.
The Inter@ctive Week @Net Index fell 2 to 174.46.
The Dow became yet another major stock index to drop more than 20 percent off its high, entering bear territory. Both the Nasdaq and the Standard & Poor's 500 Index are already well below 20 percent off their highs. Wall Street defines a bear market as on that is 20 percent off its high.
"The Nasdaq is perceived as an index that has just been devastated and it's so low that it's just a matter of when it bottoms," Barry Hyman, chief investment strategist at Weatherly Securities told Reuters. "Investors are now going to concentrate on lightening up positions in the Dow and the S&P (500) because they haven't gone down as much. As a relative investment right now, the Nasdaq may look a little bit more appealing."
But the news wasn't all bad. Liberate Technologies (Nasdaq: LBRT) rose 88 cents to $8 after topping expectations for the seventh straight quarter; analysts also touted the interactive TV company as recession-resistant.
Microsoft managed to gain 84 cents to $50.91 despite some bearish analyst remarks. Goldman Sachs' Rick Sherlund lowered estimates for Microsoft’s (Nasdaq: MSFT) fiscal third quarter, adding that the warnings about slowing growth from PC companies will have to affect the software giant.
Embattled software firm Corel (Nasdaq: CORL), up 9 cents to $2.09, said it will post a profit in its first quarter, two quarters ahead of the company’s scheduled return to the black.
GoTo (Nasdaq: GOTO) rose 63 cents to $5.91 and told investors Thursday that it would surpass its previously announced revenue outlook and report a smaller-than-predicted loss for the first quarter.
Tech losses were limited.
Amazon (Nasdaq: AMZN) was down 22 cents to $9.78, AOL Time-Warner (NYSE: AOL) fell $1.48 to $36.36 and Yahoo!(Nasdaq: YHOO) was unchanged at $13.69.
Cisco(Nasdaq: CSCO) fell 56 cents a share to $18.75, Intel (Nasdaq: INTC) rose 81 cents to $26.38 and Oracle (Nasdaq: ORCL) fell 31 cents to $14.44.
ZDII staff and Reuters contributed to this roundup.