How Low Can Nasdaq Go?

Traders continued to suck the froth off the top of the Internet sector Thursday, reinforcing the idea that the party might be over for money-losing dot-coms.'s Internet Sector index fell 7.35 percent, an even worse loss than Tuesday's remarkable dive. The Nasdaq lost 3.88 percent to close at 3727.13. As traders shifted money from the technology and Internet sectors, blue chips and cyclicals benefited, as shown by the Dow, which gained 1.17 percent to close at 11253.26, and the S&P 500, which ticked up 0.1 percent.

The Nasdaq is down more than 12 percent on the week, which makes this week's sell-off an official correction. Helping to push the sector lower: continued earnings warnings from Internet, technology and telecom companies, as well as continued fears that the Fed will raise interest rates next month, perhaps by as much as half a point. Technology and telecom stocks were hit especially hard Thursday thanks to profit-taking driven by tax considerations. Together, those sectors gained about 50 percent in value in the fourth quarter of 1999.

Lucent Technologies announced after the closing bell that its fiscal first quarter results will fall short of expectations. Before the announcement, Lucent fell $3.38, or 4.67 percent, to close at $69. Other telecom stocks also continued to tumble. MCI WorldCom fell $4.06, or 7.92 percent, to $47.19.

Qualcomm, the biggest non-Linux story of the fourth quarter of 1999, fell $16.38, or 10.47 percent, to close at $140.06. Qualcomm gained an eye-popping 2,400 percent in 1999. So far this year, it has given up more than 20 percent.

The big Net stocks all lost ground, and lots of it. Yahoo fell $42.31, or 10.31 percent, to close at $368.19. CMGI lost $32.75, or 11.57 percent, to $250.25. gave up $4.19, or 6 percent, to finish at $65.56. America Online fell $5.06 to $69, a drop of 6.83 percent.

But losses in the sector were both broad and deep., which issued an earnings warning after the close Wednesday, dropped a buck, or 13.28 percent, to close at $6.53. did the opposite, issuing a forecast Wednesday that results will outdo analyst expectations. But it still fell $2.38, or nearly 4 percent, to land at $57.56.

Traders took some of the shine off Starmedia, taking its shares down $7.25, or 18.35 percent, to a closing price of $32.25.

Even ExciteAtHome, which spent much of the day trading higher on news that it will offer free narrowband Internet service, ended up lower, losing $1.56, or 3.91 percent, to close at $38.38.

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