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Dell still down, market zigzags

Dell Computer stock continues to tumble, putting a damper on most technology stocks and sending the wider market teetering higher and lower.

Dell Computer's stock tumbled from the opening bell today, dragging down most technology stocks and the wider market along with it, as investors grew fearful that the PC maker's earnings may signal a slowdown throughout the computing industry.

The Nasdaq Composite Index dropped 2.8 percent or 64.88 points, to close at 2,248.99. The Dow Jones Industrial Average shed 1.09 percent or 101.56 points, to 9,195.47.

"Everyone looks at technology stocks for direction," said Lance Zipper, managing director of trading at Brean Murray & Company. "Dell's earnings are having a significant impact on technology stocks."

Although the direct marketer of computers met expectations for the quarter, analysts are concerned about the future. With sales growth that appears to be slowing sequentially, analysts believe that a slowdown could be coming for Dell, or even the industry as a whole.

Dell stock plunged 8.03 percent to 81.63 in afternoon trading. It was the most heavily traded stock this afternoon, with 81.5 million shares changing hands. The stock has traded as high as 110 and as low as 27.03 during the past 52 weeks.

Still, the repercussion of Dell's earnings are not as bad as some had expected.

"We expected the market to be affected much greater than it has been," said Zipper.

The Nasdaq market has been in a consolidation phase for the last week with a lot of profit taking, especially in the technology area, analysts noted.

"What is going on right now is pretty healthy," said Zipper, who noted he thinks there was simply too much speculation going on in the market.

"You are seeing considerable corrections in the technology stocks, as you can see with Dell," said Zipper, adding that Dell has been slipping steadily over the past few weeks.

Zipper said investors have seen technology stocks climb steadily. Even as these stocks took a step backward, they then also managed to take two steps forward.

"People are starting to figure out that these stocks are starting to go down a lot quicker than they go up," Zipper said. "This might take some of the speculative aspects out the market."

Dell's main rival Compaq Computer slid 0.44 percent lower. Microsoft dropped 2.16 percent, and Cisco Systems slipped 1.51 percent.

However, some technology issues headed higher.

Web portal Yahoo edged 0.09 percent higher; Intel climbed 0.94 percent; and Applied Materials rose 4.33 percent. America Online edged 0.55 percent higher.

One gainer that actually burst the seams today, rising as much as 102 percent, was Geoworks, a provider of software and service solutions for the wireless communications industry.

Shares of Geoworks were up 59.26 percent after online retailer Amazon.com said yesterday that it had invested $5 million in Geoworks common stock, representing about a 7 percent interest in the company.

Amazon stock dropped 0.51 percent.