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Tech Stocks Caught In Slide Of Wall Street Avalanche
The Dow Jones industrial average continued its volatility with a decline of 7.33% to close at 8,579.91, as the Nasdaq index also declined and major tech companies fell with it on Thursday.
Just three weeks ago, as Lehman Brothers' announced bankruptcy, technology insiders predicted that it would take at least six months for the sector to feel the pain of the credit crisis.
Companies that sell software, data storage products, networking goods and services, and other IT offerings hoped that they could target companies outside the financial industry and fare well. Many also hoped that it would take months before the broader economic volatility hit vendors.
Many financial analysts forewarned that market conditions were unprecedented and said no one could forecast what would happen next. By Thursday, the pain had spread across all sectors.
Thursday, like the previous day, seemed to hold potential for a little reprieve from recent losses -- until shares slid steeply in the final stretch. The Dow Jones industrial average lost 800 points in the last two and a half hours of trading, and the landslide gained momentum in the final moments before the closing bell.
In the end, the Dow fell 17% this week and 42% from its high a year ago. More than 20% of that loss occurred in recent days.
The tech-heavy Nasdaq dropped 5.47% from Wednesday to close at 1,645.12. Virtually all tech categories fell, after a few had bucked the trend with some gains a day earlier.
BlackBerry maker Research In Motion saw a second day of slight gains after announcing its touch-screen device, the BlackBerry Storm, to close up 2.48%, at $59.03.
Verizon, which has exclusive rights to the device, saw a second day of losses in a weak telecom environment to close down 6.49%, at $25.93, a new 52-week low. Competitor AT&T was down 7% to close at $23 per share, also a 52-week low for the company.
Apple closed down 1.17%, at $88.74, despite signaling a significant laptop announcement for next week. Analysts and reporters predicted that new products could give the company a boost as the holiday shopping season nears.
Microsoft followed the trend to close down 3.09%, at $22.30. Computer maker Dell also lost share value, closing down 0.52%, at $13.43, slightly above its 52-week low of $13.23.
IBM appeared poised for rebound midday, before it also slid 1.71% to $89, even after Big Blue announced that its third-quarter profits beat estimates.
Amazon dropped 8.23% to $56, while RealNetworks declined 7.16% to close at a 52-week low of $3.63 per share.
Oracle fell 3.97% to $16.21 a share, while Cisco shares decreased 6.27% to close at $17.19.
Yahoo suffered an 8.07% drop to close at $12.65, while Google shares lost 2.7% of their value to close at $328.98.
It was impossible for investors to gauge the health of many companies when the cost of obtaining credit remained unclear and financial analysts began using the word "crash" to describe the events for the last few weeks.