Watching Monday's tech stocks was like driving by a highway accident: You wanted to look away, but you just had to stare.
The media offered a variety of excuses for Nasdaq's tumble - the 7.8 per cent drop since last Monday being the exchange's third-sharpest decline in history - and girded readers for more gore with the reminder that today is the twelfth anniversary of the '87 crash.
CBS MarketWatch's Cecily Fraser pointed out that even analysts' bullish calls couldn't redeem Net stocks. After white-glove backer Goldman Sachs launched coverage of luxury e-retailer Ashford.com with a "buy" rating, Ashford's stock promptly dropped. Online bookstore Fatbrain.com pocketed a $US20 million investment from Paul Allen's Vulcan Ventures and still closed down. When investors get the willies, tech stocks are the most vulnerable, Scott & Stringfellow technical analyst Richard Dickson told Fraser. "The stocks that are going to get hit the hardest are the ones that have been sticking up above everything else, and that's obviously technology," he said.
The New York Times couldn't make up its mind as to how grim things look on Wall Street. Reporting how after-hours investors bailed on Dell when the company announced high chip prices would dent its quarterly earnings, the Times' Lawrence Fisher called the market "sensitive to bad news".
But fellow reporter Floyd Norris flagged Nasdaq's volatility as the culprit. His chronicle of the exchange's head-snapping performance showed that a decade ago Nasdaq averaged one big day - at least 1 per cent above or below the previous day - a month. This year, it rides three such rollercoasters each week. To Norris, the five tech issues that hog a third of Nasdaq's value - Microsoft, Intel, Cisco, Dell and Sun - are acting suspiciously like the energy stocks that rose to unsupportable levels in 1980.
The Washington Post attributed the nosedive to a delayed reaction to interest rates, a natural correction and Y2K fears. When it came to the Net's role, reporter Ianthe Jeanne Dugan was cagier. She described shareholders as "fleeing public companies they believe are most vulnerable - those whose share prices are highest compared with profits." Sound like any companies you know? But the Wall Street Journal pointed straight to the Net as Nasdaq's main destabiliser. "There is a body of belief in the market that until the Internet stocks in particular give it up, it may not be safe to go back in the water," Ciaran O'Kelly of Salomon Smith Barney told the Journal.
Meanwhile, AP had the early word today on the Labor Department's nervously awaited consumer price index. As predicted, inflation at the consumer level jumped 0.4 percent in September, the biggest increase in five months. Maybe Martha Stewart's potpourri-scented IPO will bring the economic equivalent of an herbal sedative to the market. But don't count on it.