The US Nasdaq index dipped to its lowest level for more than a year as ongoing worries about corporate earnings and the disrupted presidential race sparked heavy selling.
Technology sectors bore the brunt of the weakness as analysts took a negative view of several big cap stocks. The Nasdaq closed down 151 points at 2,875 while the Dow slipped 167 points to 10,462.
Influential brokerage Morgan Stanley Dean Witter gave the bearish trend an early push as it cut ratings on networking stocks Juniper Networks and Redback Networks and lowered price forecasts for Cisco Systems and Extreme Networks. Shares of all four companies sank, with Juniper down more than 16 per cent.
Bad news for Oracle Systems, down about 13 per cent, also hurt the tech sector after the company's executive vice-president Mr Gary Bloom said he would leave to run Veritas Software. Veritas shares benefitted, up $3.31 at $113.44.
It was the second loss of a senior executive this year for Oracle, the world's second largest software maker, which employs 1,000 in Dublin and is looking to double that number. Chief Global Strategist Mr Edward Kerschner of UBS Warburg and Paine Webber removed the company from his list of highlighted stocks. EBay was also a heavy loser, down 20 per cent, following a downgrade from usually-bullish Lehman Brothers' chief strategist Mr Jeffrey Applegate. Mr Applegate also changed his asset allocation of 20 per cent in cash to 20 per cent in bonds.
Other heavily-traded Nasdaq shares caught in the sell-off included Sun Microsystems, JDS Uniphase, Ariba and Qualcomm.
Media stocks also fell, as giants America Online and Time Warner weakened after they agreed to let Earthlink sell internet services to Time Warner in a move to satisfy US antitrust regulators.
In the broader market there was also little cheer. Investors stuck to safe bets such as utilities, while dumping financials and consumer cyclicals along with tech stocks. American Express, down 5 per cent, weighed heavily on the Dow.
