The Nasdaq composite index fell 106.93 to 3,767.91, and the Standard & Poor's 500 index dropped 10.95 to 1,446. The Dow Jones industrial average fell 49.85 to close at 10,564.21, led by Home Depot.
At the end of regular trading, Intel was off $2 at $125.06, while Microsoft sank $1.94 to $66.88.
The CNET tech index shed 51.70 to close at 2,784.64, as 82 of the 98 stocks in the index fell, 14 gained and two were unchanged.
Of the 18 sectors tracked, Internet e-tailers and server software makers posted the sharpest declines, falling about 6 percent and 5 percent, respectively. Internet service companies were the day's largest gainers, climbing 1 percent.
iBasis, a mobile telecommunications company, posted significant percentage gains on the Nasdaq after the company announced that China Mobile Telecommunications will route its voice and fax traffic over iBasis' network. Its shares jumped $7.50, or about 30 percent, to $32.88. Volume topped 3.5 million shares, about seven times the stock's average daily volume.
Among members of the CNET tech index, Citrix Systems and DoubleClick posted significant losses.
Citrix recorded the largest loss in percentage terms today on the Nasdaq after announcing that earnings would be lower than expected for the current quarter.
The stock dived $18.94, or 46 percent, to $22.25 on a volume of 94.5 million shares, more than 13 times the stock's average daily volume. It was the most actively traded stock on the Nasdaq.
DoubleClick fell $6.06, or 12 percent, to $44. MicroStrategy also posted huge losses today after last week's 140 percent run-up. MicroStrategy fell $23.31, or 37 percent, to $38.94 on volume of 23.8 million shares, more than seven times the stock's average daily trading volume.
The Philadelphia semiconductor index fell 54.59, or nearly 5 percent, to 1,114.24, led by chip equipment maker Lattice Semiconductor, which lost $5.88 to close at $70.13.
Among other shares making moves today, federal regulators have demanded more information about several key issues surrounding the proposed $124 billion merger of America Online and Time Warner. AOL fell $2.06 to $52.69, while Time Warner dropped $2.81 to $78.
And in a case that offers a rare glimpse into the complicated nature of building the Internet's infrastructure, Cisco is mired in a lawsuit spanning several states that charges the company with activities ranging from the sale of faulty equipment to conflicts of interest. The stock fell $2.25 to $62.13.