Last Update: 4:04 PM ET Mar 30, 2000
NEW YORK (CBS.MW) -- A bloodbath in the technology sector caused the Nasdaq to fall a hefty 4 percent Thursday as investors dumped small-and large-cap stocks alike.
Key support levels failed to hold on the Nasdaq, sparking another round of selling in afternoon trading, which spilled over into Dow stocks. The blue-chip barometer, thanks to interest in retail and consumer stocks, had managed to hold on to mild gains for most of the trading session.
The Nasdaq is down about 14.7 percent from its record intra-day high of 5,132 set on March 10 and has fallen 11.8 percent so far this week. The current correction is the Nasdaq's fourth of the year.
"There are as few bids on the way down now as there were offers on the way up," exclaimed Scott Bleier, chief investment strategist at Prime Charter. "We're suffering a hangover from February's party."
The market, Bleier continued, is going to extremes with both institutions and individuals bailing out. Valuations reached levels that were simply unrealistic, he added, and a shakeout was bound to happen.
All tech sectors saw sharp losses, led by Internet, networking and chip stocks. In the broader market, retail, paper and drug stocks were the only areas in the black.
The Dow Industrials fell 38 points, or 0.3 percent, to 10,980.
The Nasdaq Composite tumbled 186 points, or 4.0 percent, to 4,457.
"The hot momentum at the beginning of the year has shifted to negative momentum, and as a result players are squeezing through some closing doors trying to get out," said Robert Dickey, chief technical strategist at Dain Rauscher Wessels.
"Investors are trying to guess where the bottoms are on these previously hot issues but as long as they sell off hard and close low in their ranges there will likely be more selling to follow."
The market's psychological nerve is unraveling, according to Brian Belski, chief investment strategist at George K. Baum & Co.
Big-name tech stocks were the last to get hit by the latest round of tech selling. Helped by window-dressing by fund managers last week, the tech heavyweights managed to hold up even as small- and mid-cap shares came under heavy selling pressure.