The Dow Jones Industrial Average tumbled 218.68 points, or 2.21 percent, to 9,671.83. The blue chip index sank as much as 257.80 today. The technology-heavy Nasdaq Composite Index plunged a whopping 3.05 percent, or 73.10 points, to 2,322.84.
"Everyone seems scared to death," said Robert Froehlich, chief investment officer at Scudder Kemper Investments. "They seem to think the next stop is Dow 9000, and a week ago they thought this [market] was the best place to be. It's all based on emotion."
IBM, which is also likely to face falling revenues, slipped 0.6 percent, while Dell sank 5.78 percent. Compaq, running counter to today's trend, managed to eke out a 1.66 percent rise.
Even Internet stocks, which have recently been posting strong gains and have helped prop up the market, were slammed hard today.
Still, the swift red current could not slow down another high-flying Internet initial public offering.
Autoweb.com, an online car seller, more than doubled on its first day of trading today. The stock, priced at 14 per share, surged 185.71 percent to close at 40.
In light of today's successful Autoweb IPO, rival Autobytel.com raised the expected share price of its IPO 24 percent. The company and its existing shareholders now plan to sell 4.5 million shares at 20 to 22 each, up from 16 to 18.
Yesterday, the Dow closed down 13.04 points, or 0.13 percent, at 9890.51, while the Nasdaq ended the day off 25.35 points, or 1.05 percent, at 2395.92.
Reuters contributed to this report.