SAN FRANCISCO (04/05/2000) - Is the end near? Depends on how you define it. An end to an ever-rising market? Quite possibly. The end of investor uncertainty?
Definitely not. The Nasdaq dropped as much as 540 points, or nearly 12 percent, by 1:30 EDT before starting a recovery. Tech stocks plunged to lows previously unimagined. The drop followed a week's worth of losses, including an 8 percent plunge yesterday, leaving investors wondering whether a much-feared bear market might be in the offing. The Dow, which had been holding steady through most of the tech gyrations, followed Nasdaq today, with a solid drop of 3 percent around midday. The Dow, too, began to bounce back and was down less than one percentage point at 2:25 p.m.
The large point losses in both indices appeared to create extra panic among investors. Although many viewed previous price drops as opportunities to buy, they seemed more anxious to get out today, unsure whether the market would rise in coming days and unwilling to subject their portfolios to further gutting.
The favorite tech stocks that constitute the bulk of the Nasdaq's value took unprecedented hits, regardless of sector. Big-cap tech stocks shed large amounts.
At midday, Sun Microsystems had plunged nearly 16 percent to $75.94, Oracle had dropped 13 percent to $66.75, Cisco had lost almost 10 percent to $66 and Intel had shed nearly 8 percent to $120.91. Internet highfliers, long viewed as problematic to long-term market health, were far worse off. CMGI had lost nearly 25 percent by midday to hit $75.13, and Internet Capital Group had plunged 27 percent to $56.81. Yahoo had dropped 13 percent to $139.70, and JDSU had lost 23 percent to $86.13. Recently popular b-to-b plays suffered as well, with Commerce One losing nearly 11 percent to $105.63 and Ariba dropping 7 percent to $82.25.
Ironically, Microsoft, seen as this week's instigator of tech-sector losses, dropped a lot less than most of its Nasdaq brethren. By midday, it had lost just 5 percent to hit $86.50.