Technology stocks continued to fall yesterday amid profit warnings and the announcement by Baltimore that the company would have to carry out further restructuring.

Technology analysts warned that Europe was only now catching up on the slowdown in the sector in the US and said that worse was to come.

Shares in Dutch semiconductor company ASML fell heavily following a profit warning, as did shares in Marconi, whose plans to re-price share options are unravelling.

The news from Europe also hit US technology and telecoms stocks. Marconi's warning sent shares falling in Cisco Systems, Nortel and Lucent Technologies. The tech-laden Nasdaq closed down 2.8 per cent.