The Nasdaq plunged 101.70 points to 2,067.03, and the Dow Jones industrial average dropped 185.60 points to 10,672.65.
Shares of eBay slumped $5 to $34.13 after Lehman Brothers analyst Holly Becker issued a pessimistic note about the company's future.
Supply chain software maker i2 Technologies announced plans to acquire RightWorks, a maker of procurement software in a deal worth around $114 million. The news shook up the business-to-business marketplace with speculation that it could lead to a price war. i2 was off $2.31 to $19.13, Commerce One slipped $2.38 to $11.25, Ariba fell $1.75 to $11.88, and PurchasePro dropped $1.44 to $10.50.
Analysts worried that bad news from Intel could be a sign of weakness in overseas markets. The company lowered revenue estimates for the first quarter Thursday and announced it would trim 5,000 jobs. Intel fell $3.56 to $29.69. Rival Advanced Micro Devices dropped $2.25 to $23.75.
The Securities and Exchange Commission may be probing a sale of stock by Amazon.com CEO Jeff Bezos. The New York Times reported that the probe centers on stock sold by Bezos in early February just before a Wall Street firm released a negative research report on the company.
Among other leading tech issues, Cisco Systems dropped $2.19 to $20.63, and Microsoft was down $2.50 to $56.75. IBM fell $6.17 to $100.30, and Sun Microsystems lost $2.06 to $18.25.
Staff and Reuters contributed to this report.