Internet stocks were hardest hit Monday as Inter@ctive Week's @Net Index shed a whopping 46.20 points to close at 303.92.
The carnage was so severe and so widespread that even the pillars of the technology sector: Intel, Dell, Cisco and Microsoft, took alarmingly large losses.
Whether this is the beginning of a bear market or simply a major correction in the middle of a bull market remains to be seen, but panicked investors showed absolutely no confidence in technology stocks.
"The boogie man is out of the closet," said Stephen Shobin, an analyst at Lehman Brothers. "This isn't about interest rates or Asia. This is a definitive sign that investors are worried about our economy. Right now, preservation of capital is a must."
Analysts who had warned that Internet stocks were terribly overvalued were vindicated Monday as Yahoo! Inc. (Nasdaq:YHOO) plunged 14 1/16 to 69 while America Online Inc. (NYSE:AOL) and Amazon.com Inc. (Nasdaq:AMZN) plummeted 14 13/16 and 22 9/64 a share, respectively.
Dell Computer Corp. (Nasdaq:DELL) fell a staggering 18 3/4 to 100. Apple Computer Inc. (Nasdaq:AAPL) lost 3 to 31 3/16. Compaq Computer Corp. (NYSE:CPQ) and Gateway Inc. (NYSE:GTW) slid 2 7/8 and 6 1/16 a share, respectively.
Intel Corp. (Nasdaq:INTC), which was supposed to be on the verge of a healthy run-up, closed off 5 13/16 to 71 3/16. Advanced Micro Devices Inc. (NYSE:AMD) lost 1 13/16 to 13 3/8 and IBM Corp. (NYSE:IBM) hacked off 9 7/8 to 112 11/16.
Among widely held networking and telecommunications stocks, Cisco Systems Inc. (Nasdaq:CSCO) fell 12 13/16 to 81 7/8; 3Com Corp. (Nasdaq:COMS) dipped 2 3/8 to 23 11/16; Ascend Communications Inc. (Nasdaq:ASND) shed 5 to 35; AT&T Corp. (NYSE:T) lost 5 5/16 to 50 1/2; GTE Corp. (NYSE:GTE) slipped 1 1/2 to 50 1/16 and WorldCom Inc. (Nasdaq:WCOM) dropped 5 7/8 to 40 15/16.
Source: Inter@ctive Investor