Tech Industry

MARKET CLOSE: Dow, Nasdaq absorb triple-digit losses

Profit warnings from Nortel Networks and Palm gave technology investors an excuse to sell shares Wednesday as the Nasdaq composite shed 118 points, or 6 percent, to finish at 1,853.92.

The Dow Jones industrial average lost 162 points to close at 9,785.35.

"Tuesday's rally was just a bear-market rally. We have learned to sell on these rallies," Ted Oberhaus, manager of equity trading at Lord Abbett & Co. told Reuters. "Once upon a time we used to buy on the dips. Year after year that proved extremely profitable, but in this environment you learn to sell into the rally. The catalyst is the earnings warnings."

Nortel Networks (NYSE: NT) fell $2.76 to $14 after warning that it will miss its own revised estimates this quarter. Other network-equipment stocks fell in sympathy as Cisco Systems (Nasdaq: CSCO) lost $2.38 to $15.75, and Lucent Technologies (NYSE: LU) closed off $1.43 to $10.27.

Ciena (Nasdaq: CIEN) lopped off $7.03 to $46.78, and JDS Uniphase (Nasdaq: JDSU) clipped $3.38 to $19.94.

Palm (Nasdaq: PALM) shares plunged $7.44 to $8.06 after the company predicted that sales would slump $250 million below estimates for its fourth quarter.

Shares of Palm rivals also fell. Handspring (Nasdaq: HAND), which makes a competing handheld using the Palm OS, closed off $5.31 to $10.88, and Research in Motion (Nasdaq: RIMM), which develops two-way messaging devices, lost $4.43 to $20.25.

Intel (Nasdaq: INTC) dropped $2.44 to $26.94. Advanced Micro Devices (NYSE: AMD) slid $1.99 to $27.70, and IBM (NYSE: IBM) closed off $5.09 to $94.41.

PurchasePro (Nasdaq: PPRO) lost 50 cents to $6.75, and AOL Time Warner (NYSE: AOL) shed $2.24 to $40.76, after the companies announced they would extend their business-to-business and e-commerce efforts by inking 10 new agreements to develop the Netscape Netbusiness marketplace.

Yahoo (Nasdaq: YHOO) trimmed 63 cents to $14.94. (Nasdaq: AMZN) and eBay (Nasdaq: EBAY) fell 84 cents and $3.75 a share, respectively, while CMGI (Nasdaq: CMGI) closed off 35 cents to $2.67.

Among widely held PC stocks, Dell (Nasdaq: DELL) chopped off 56 cents to $26.44, Compaq (NYSE: CPQ) lost 79 cents to $19.42, Gateway (NYSE: GTW) dipped 47 cents to $16.53 and Apple Computer (Nasdaq: AAPL) lopped off 70 cents to $22.17.

Microsoft (Nasdaq: MSFT) sawed off $2.75 to $55.50. Oracle (Nasdaq: ORCL) lost $1.55 to $15.10, and Sun Microsystems (Nasdaq: SUNW) ended off $1.56 to $15.85.

ZDII staff and Reuters contributed to this roundup.