Technology companies were hit hardest by the carnage on Wall Street yesterday with the IT-heavy Nasdaq index suffering its worst losses since October 1987.
Some of the biggest names in the industry bore the brunt, with Dell, Cisco, Microsoft and Intel having almost $58 billion erased from their combined market value.
While in the past these companies have typically held their own during market sell-offs, yesterday was a different story, with Dell dropping 15.79 per cent to close at $100, having lost more than 20 per cent of its value since last Thursday. It was the most active stock yesterday, with 48.6 million shares sold.
The other companies were also badly hit, with Cisco?s market value falling 13.53 per cent, closing down at $81.88, whilst Microsoft fell nearly nine per cent, closing at $95.94. Intel shares dropped 7.5 per cent to close at $71.18 and IBM fell 8.1 per cent to $112.63.
Analysts said there was no one major factor behind the sell-off, although the carnage was exacerbated by concerns of slowing economic growth, leading investors to assume fewer sales of computers and software, as well as fears that a general collapse in stock prices was underway.
Although the big names lost the most in market value, Internet companies were also heavily affected, with shares of online bookstore Amazon.com dropping $22.14 to $83.75, a 20.9 per cent loss. The company has lost roughly one-third of its market value since last Thursday, when its shares traded at $119. Previously, Internet companies have seemed to be almost impervious to the downturn.
America Online plunged $14.31 to $81.94, despite an announcement yesterday that it had reached a marketing agreement with Hewlett Packard. Under the deal, an AOL icon will appear on the front screens of certain HP Pavilion computers, allowing users to click on the icon and sign up directly for AOL service.
Shares of Internet search engine companies also fell sharply. Yahoo lost 16.9 per cent of its value, falling $14 to $69. Excite closed at $21.75, down $8.8, or 28.8 per cent. Lycos dropped $8.19 to $21.69, or 27.4 per cent.
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