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US technology stocks took a pounding in early morning trading today, driving the Nasdaq composite index below the 2,000 level for the first time in more than two years.
The fall came after news of layoffs at computer networking giant Cisco Systems sent a shock wave through the market.
"There is certainly fear out there - fear and disappointment," said Mr Edgar Peters, chief investment officer at PanAgora Asset Management.
"So many people believed in the New Economy story to such an extent and to see all those dreams completely dashed in front of you is demoralising. The idea that everything was different with the New Economy is going to the wayside," he said.
The technology-laden Nasdaq, which rocketed to record high of 5,048.62 a year ago, crumbled 69.63 points, or 3.39 per cent, to 1,983.15. Roughly fourteen of the 25 most active Nasdaq stocks slammed to fresh 52-week lows.
The Nasdaq now is down more than 60 per cent from its March 10th, 2000 record high as profit warnings mount in the flagging economy. That drop surpasses its drubbing of 59.9 per cent during the 1973-74 prolonged bear market.
The last time the Nasdaq composite traded under the 2000 mark was December 16th, 1998, and the last time the once mighty index closed below 2000 was December 14th, 1998.
Cisco, the world's leading networking equipment maker for the Internet, dropped $1.75 to $18.74 in frenzied trading and drove the Nasdaq lower. The stock slid to $18.58 early, a low not seen since early December 1998.