Nasdaq tumbles on broad tech decline
Technology stocks drop as uncertainty over the presidential election and economic concerns fray investors' nerves.
The Nasdaq composite index fell 145.51, or 5 percent, to 2,734.98, and the Standard & Poor's 500 index dropped 12.88 to 1,336.09. The Dow Jones industrial average fell 38.49 to 10,507.58.
The Nasdaq hit new lows for the year after Al Gore said in a nationally televised speech that he would continue to pursue a recount of votes in Florida through the courts.
"The election is more important than people think," said Bob Stoval, a market strategist at Prudential Securities. "The election and its aftermath diminishes (U.S.) stature and could prove to stiffen the resolve of OPEC, who I don't think will do anything to make us happy."
The decision by the Organization of Petroleum Exporting Countries to cut oil production has kept oil prices high over the past few months and has raised the cost of doing business.
In addition, investors saw more evidence Tuesday indicating the U.S. economy has been slowing since the Federal Reserve started raising interest rates in June 1999.
Sales of durable goods--products such as washing machines that are expected to last at least three years--fell a steep 5.5 percent in October compared with September's increase of 2.4 percent. Analysts expected a 1.3 percent decline.
The Commerce Department said Tuesday that last month's decline was the first since a 13.2 percent decrease in July. The $12.1 billion slide pushed total durable-goods orders down to $209 billion for the month.
Consumer confidence also fell in November to its lowest level in more than a year. The index, based on a survey of 5,000 U.S. households by the Conference Board, dropped to 133.5 from 135.8 the month before. Consumers account for about two-thirds of economic activity.
"While consumer confidence remains at very high levels, signs of caution and concern have begun to show," Peter Kretzmer, senior economist at Banc of America Securities, wrote in a report. "Recent energy cost gains, stock market declines, and increased political uncertainty are being felt."
The CNET tech index declined 91.16 to 2,297.80. Laggards outnumbered leaders, with 86 of the 97 stocks in the index falling, 10 rising and one remaining unchanged.
All of the 18 sectors tracked by CNET Investor dipped into the red. The server software sector posted the sharpest decline, sliding 7.5 percent. Several sectors posted declines of about 6 percent, including Internet content, e-tailers, Net services, semiconductors and server software.
Amazon.com fell $2.97, or more than 10 percent, to $25.03 as investors and consumers focus heavily on e-commerce Web sites during the holiday shopping season.
Other e-commerce stocks fell as well. eToys lost 50 cents, or 25 percent, to $1.50, and eBay dropped $2.16 to $36.06.
The shopping season also prompted chipmaker Broadcom to continue its buying spree after a break for Thanksgiving. The company said Tuesday it will buy Israeli chipmaker VisionTech for $776.6 million in stock. The acquisition is Broadcom's 12th this year. Broadcom's shares fell $12.81, or 12 percent, to $85.06.
Oracle dipped 47 cents to $22.66. The database giant announced that former White House press secretary Joe Lockhart has joined its senior management team and will be in charge of communications at the company.
Among large-cap tech stocks, Microsoft fell $3.69 to $67, and Sun Microsystems declined $6.94 to $81.25.
AT&T fell 25 cents to $18.63. The company said that it has appointed David Dorman president. He was formerly chief executive of the long-distance phone company's Concert joint venture with British Telecommunications.
Covad Communications fell 75 cents, or 26 percent, to $2.13. The troubled provider of high-speed Internet access announced Monday that it will cut about 400 jobs, or 13 percent of its work force.
America Online fell $3.41 to $40.56; Time Warner dropped $4.87 to $61; and EarthLink dipped 25 cents to $6.94.
An FTC official confirmed Tuesday that the scheduled Nov. 30 vote on the AOL-Time Warner merger has been postponed to allow a closer examination of the companies' deal last week with rival Internet service provider EarthLink.
Among chip stocks, Rambus fell $8.38 to $43.75, and Novellus Systems fell $4.75 to $28.25.