NEW YORK (CNNfn) - The Nasdaq composite index tumbled to its lowest close of the year Tuesday and wiped out all of its gains since early November, as fears grew that higher interest rates will hurt earnings.
Technology stocks, whose outsized gains fueled the bull market through March, fell for the fifth straight session, pushing the Dow Jones industrial average and S&P 500 index lower.
The losses came exactly one week after the Federal Reserve raised interest rates and warned that even steeper borrowing costs may lie ahead.
"The major trend in the market over the last couple of weeks has been uncertainty," Francis Gannon, portfolio manager at SunAmerica Asset Management told CNN's Street Sweep. "Uncertainty about the Fed, uncertainty about earnings, and we're seeing a continuation of that today."
In losing 199.66 points, or 5.9 percent, the Nasdaq closed at 3,164,55, and the index's fifth loss in five sessions put it solidly below its previous low of the year -- 3,321.29, set April 14. Tuesday's close was its first below 3,200 since Nov. 11.
 Other indexes also fell. The Dow shed 120.28, or 1.1 percent, to 10,422.27. The S&P 500 dropped 26.86, or 1.9 percent, to 1,373.86.
In a session of swings, the market opened lower, popped higher, retreated and then edged upward again. The three major indexes ended just above their lowest levels of the session.
Explaining this wavering, Peter Cardillo, director of research at Westfalia Investments cited the absence of market-moving news. No major earnings reports are scheduled this week, and the only notable economic indicators come Thursday and Friday. Fed policy makers don't meet again for more than a month.
"There aren't any (economic) numbers to say, 'Hey, the economy is slowing,' or 'Hey the economy is strengthening,'" Cardillo said.
More stocks fell than rose amid light trading volume. Declining issues on the New York Stock Exchange topped advancing one 1,586 to 1,334 as volume reached 865 million shares. Nasdaq losers beat winners 2,767 to 1,261 as more than 1.3 billion shares changed hands.
In other markets, the dollar slipped against the yen and euro. Investors sought safety in fixed-income securities, sending Treasuries higher.
Techs keep falling
The Nasdaq's steady losses since March 10, when the gauge hit a record high of 5,048.62, come as interest rates have jumped to their highest levels in nine years. The Federal Reserve last week tightened credit for the sixth time in 11 months, and hinted that more rate hikes lie ahead. Analysts expect difficulty for the market until the number and consequences of those hikes are known.
 "People are still nervous about the interest rate climate and how much and when Greenspan and company will raise rates," Peter Coolidge, senior trader at Brean Murray & Co., said, referring to Federal Reserve chief Alan Greenspan.
The Fed has acted to slow the economy's growth and pre-empt rising inflation. But steeper borrowing costs can dampen corporate profitability, hurting stocks.
Tech stocks, which soared the farthest through March, fell the most.
Intel (INTC: Research, Estimates) shed 8-1/2 to 109-7/8. Oracle (ORCL: Research, Estimates) lost 5-5/16 to 62-1/2, and JDS Uniphase (JDSU: Research, Estimates) tumbled 6-3/16 to 79-1/8.
Frank La Salla, CEO at BHF Securities, told CNNfn's market coverage that as long as there's uncertainty about the Fed, stocks should continue to fall. (359K WAV) (359K AIFF).
Still, some analysts blame the losses more on sentiment than fundamentals.
 "Psychology has changed dramatically since the March 10 high," said SunAmerica's Gannon, who argues that companies and earnings prospects are still in good shape.
Tom Galvin, chief investment strategist at Donaldson Lufkin & Jenrette, agreed.
"I don't think that the fundamentals have changed dramatically," he told CNN's Street Sweep. One of Wall Street's better-known bulls, Galvin recommends that investors continue putting money into stocks.
Some investors did. Novell (NOVL: Research, Estimates) gained 27/32 to 9-25/32. The software maker late Tuesday posted fiscal second quarter earnings of 2 cents per share, beating Wall Street expectations by a penny.
 Bank stocks also rose. Bank of America (BAC: Research, Estimates) jumped 2-5/16 to 52-9/16 and Citigroup (C: Research, Estimates) gained 1 to 62-5/16.
A buyout announcement lifted MedQuist (MEDQ: Research, Estimates). Shares of the U.S. medical electronics firm rose 3-3/4 to 42-7/8 after Philips Electronics announced a $1.1 billion takeover. 
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