NEW YORK (CNNfn) - The Nasdaq composite index plunged for the third straight session Friday, led by Cisco Systems and other technology issues, amid a lack of investor conviction and concerns over the future of interest rate hikes.
Meanwhile, the Dow Jones industrial average languished as financial stocks were hammered. Analysts said investors remained jittery, and preferred to sit on the sidelines while attempting to discern what may happen with interest rates.
"I think all eyes are on the economy and the Fed is trying to engineer a soft landing," David Kaslow, portfolio manager at Banc of America, told CNNfn's market coverage.
 The Nasdaq fell 4.1 percent this week, coming within 70 points of its April 14 low, while the Dow was little changed during the period, registering a 0.1 percent gain. But the lackluster volume gave analysts pause to suggest most investors are not in a rush to speculatively buy or sell.
"It's going to get worse before it gets better," Robin Griffiths, chief technical strategist at HSBC Securities, told CNNfn's market coverage. "There are quite a lot of people frozen like rabbits in front of headlights and they don't know what to do."
The Nasdaq shed 148.31 points, or more than 4 percent, to 3,390.40. The index is just 2 percent above its April 14 low point of the year of 3,321. The index also is off 32 percent from its March 10 high - a bear market by Wall Street's definition.
 And the Dow slipped 150.43 points, or more than 1 percent, to 10,626.85. The broader S&P 500 fell 30.26 points to 1,406.95.
Friday's "double-witching" options expiration, which normally attracts both volume and volatility, lent some support to rising volume, but analysts cautioned that actual volume, excluding options, still was light.
Market breadth was cemented in negative territory. Declining issues on the New York Stock Exchange surpassed advancing ones 1,931 to 951, as more than 853 million shares changed hands. Losers topped winners on the Nasdaq 2,879 to 1,168, on volume of more than 1.3 billion shares. Excluding options-related action, trading was below average.
In currency markets, the dollar rose against the euro but weakened versus the yen. Treasury securities gained.
Selling spree hits tech, telecoms and financials
Technology, telecom and financial issues all fell under selling pressure but there was little conviction behind the sell-off.
Another computer virus infected the technology sector but went largely unnoticed. According to computer experts, the virus is similar to the recent "Love Bug" and has struck several U.S. based multinational companies.
Analysts said the news only added to negative psychology weighing down technology issues. The most active Nasdaq mover, Cisco Systems (CSCO: Research, Estimates), shed 1-15/16 to close at 53-7/16. Intel (INTC: Research, Estimates) lost 6-1/16 to close at 117-7/8, and Oracle (ORCL: Research, Estimates) dropped 3 to end at 70-1/16.
 Shares of Ciena (CIEN: Research, Estimates) fell 20-13/16 to 116-1/2, after the optical networking company announced that its second-quarter earnings beat estimates by 2 cents a share and that its third-quarter outlook was very positive.
"It's a 'buy on the rumor, sell on the news' type of market, especially in the telecom and tech sectors," said Art Hogan, chief market analyst at Jefferies & Co.
Analysts said the telecom sector remained under pressure as a result of Thursday's published report that federal officials are said to be reviewing antitrust issues arising from a proposed merger between WorldCom and Sprint.
WorldCom (WCOM: Research, Estimates) continued to suffer, falling 1-13/16 to 37-3/4, after The Wall Street Journal said federal officials recommend blocking the company's $115 billion buyout of Sprint (FON: Research, Estimates), saying it would violate antitrust laws. Sprint phone service shares shed 1-7/8 to 53-3/8; its wireless unit (PCS: Research, Estimates) lost 5-9/16 to 52.
In corporate news, Xerox (XRX: Research, Estimates) slid 13/16 to 26, after the company's chief executive told shareholders the copier maker expects another down quarter, but then sees an improvement starting in the second half of the year.
One of its competitors, Dow component Hewlett-Packard (HWP: Research, Estimates), shed 5-7/16 to 126-1/4.
Skittish investors may have reason to hold onto their cash as analysts cautioned there may be further selling to come.
Ronald Hill, partner and equity strategist at Brown Brothers Harriman, told CNNfn's Talking Stocks that the worst may not be over for the market, especially if the economy continues to grow. (295K WAV) (295K AIFF).
Peter Coolidge, senior trader at Brean Murray & Co., agreed. "Until the market sees some clear evidence that the economy is starting to slow, not much is going to happen. There is cash out there on the sidelines but it's an apathetic feeling out there."
 Financial issues, pressured by interest rate concerns, pushed the Dow lower. J.P. Morgan (JPM: Research, Estimates) fell 4-1/4 to 129-5/16, American Express (AXP: Research, Estimates) lost 1-1/2 to 50-5/16, and Citigroup (C: Research, Estimates) slipped 5/8 to 60-15/16.
In corporate earnings, Columbia/HCA Healthcare (COL: Research, Estimates), the nation's largest hospital chain, slipped 2-5/16 to 28-3/16 after reaching a tentative agreement to pay the federal government $745 million to settle a federal billing fraud investigation.
Investors unconcerned about economic data
Analysts said most economic data would be ignored until the second quarter's key inflationary indicators are reported.
The trade deficit, which measures the amount of money spent on imports coming into the United States versus the amount taken in from exports leaving the country, widened in March to $30.2 billion, the Commerce Department said.
"It's just a minor piece of the puzzle, but it does show the continued strength of imports - an excessive demand is a problem for the Fed," said Bill Meehan, chief market analyst at Cantor Fitzgerald. 
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