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Thursday, 21 February, 2002, 22:32 GMT
Tech fears cause US stock slump
Nasdaq building interior in New York
The Nasdaq is packed full of technology issues
The leading index of US technology stocks, the Nasdaq, sank over 3% on Thursday.

Fears over the future profitability of technology firms sent the index to its lowest close since last October.


It is a very intolerant, unforgiving landscape out there

Donna van Vlack
Brandywine Asset Management
The slump came after a warning over the outlook for computer chips created wider worries about telecommunications and computer-related firms.

"I think there is a lot of fear, because people don't want to be blindsided by the next piece of bad news," said Donna van Vlack, director of trading at Brandywine Asset Management.

"It is a very intolerant, unforgiving landscape out there," she added.

Fear

Chipmakers in particular took a hammering, after a leading brokerage cut its outlook for earnings at Intel, the US' largest semiconductor firm.

Intel lost more than 6% during the day's trading, dragging down both the Dow Jones Industrial Average and the Nasdaq.

Falling stocks
Nasdaq
-3.3%
Dow Jones
-1.1%
Standard & Poor's
-1.6%
Computer Associates, the software maker, fell 10% while optical networking company Ciena dropped more than 12% of its value.

And traders said selling was accelerating towards the close, after news of a US military helicopter crash deepened the mix of fear and uncertainty on Wall Street.

Enronitis

The sliding stocks came on a day of renewed optimism for a speedy economic recovery.

New data from the Conference Board indicated that the rebound would be faster and fuller than previously anticipated.

But the repercussions of the Enron scandal are outweighing the wider economic cheer.

"There are signs that the economy is recovering, but that appears void in face of this accounting situation," said Larry Wachtel, a market analyst at Prudential Securities.

The Nasdaq tumbled 59.3 points to 1,716.

The Dow Jones industrial Average fell 106 points to 9,835.

See also:

21 Feb 02 | Business
US economic momentum grows
12 Dec 01 | Business
False starts for US economy optimism
28 Dec 01 | Business
Another torrid year for investors
05 Feb 02 | Business
Japan shares hit 18-year low
30 Nov 01 | Business
US economy shrinks fast
26 Nov 01 | Business
US officially enters recession
30 Jan 02 | Business
US economy shows unexpected strength
11 Jan 02 | Business
US economy faces 'significant risks'
02 Jan 02 | Business
US economy turning up?
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