NEW YORK (CNNfn) - The Nasdaq composite index capped off one of its worst weeks Friday, plunging more than 170 points, or more than 4 percent, as investors went on a selling spree -- betting that risky technology stocks could not continue to achieve strong revenue. The spree was apparently sparked by a negative outlook from American Power Conversion Corp.
"Today, American Power Conversion Corp., woke us up with a fairly bad report, and I think that's what's been keeping everybody bothered," Michael Carty, stock market strategist with New Millennium Advisors, told CNNfn's market coverage.
The Nasdaq fell 179.23 points, or 4.7 percent, to 3,663.00. For the week, the index shed 10.5 percent, its worst week since mid-April and its third biggest five-day loss ever. The index tumbled 431 points from Monday through Friday, making it its second-worst weekly point loss in history. The Nasdaq is now 9.9 percent off from the start of the year.
Friday's economic data renewed concern that the Federal Reserve may not be done raising interest rates, prompting investors to dump rate-sensitive financial issues, sending the Dow Jones industrial average down nearly 1 percent.
 Though not affected as severely as the Nasdaq the Dow nonetheless slid 74.96, or nearly 1 percent, to 10,511.17. The blue chip index shed more than 200 points this week, or nearly 3 percent. The S&P 500 lost 29.73, or 2 percent, to 1,419.89 and is off 4.1 percent for the week.
A government report showed gross domestic product for the second quarter growing at an annual rate of 5.2 percent, well above the 3.7 percent analysts anticipated. That accelerated the selling wave on the Dow.
 "Every day we have somebody (warning). The earnings reports have been really good but it's been a tough week for Nasdaq," said Alfred Kugel, senior investment strategist at Stein Roe & Farnham. "The financial stocks have been under pressure the whole time the Fed has been in a tightening mode, and as long as people think the GDP increases the risk that the Fed might be taking another notch (higher) in August, that's bad for the financial stocks psychologically."
Market breadth was negative. On the New York Stock Exchange, decliners beat advancers 1,900 to 897, as more than 931 million shares changed hands. On the Nasdaq, losers outpaced winners 2,929 to 1,060, as more than 1.6 billion shares traded.
In currencies, the dollar rose against the euro and the yen.
Investors spooked by revenue warnings
Warnings about corporate quarterly results drew attention again Friday, capping a week in which investors severely punished even the slightest downward deviation from expectations.
"We're going through a very news intensive period this week and the focus of all of that is slowdown of revenue growth going forward, but we're probably overreacting," said Art Hogan, chief market analyst at Jefferies & Co. "We get great numbers, but looking forward we don't have the robust growth -- so people are calling into question valuations."
American Power Conversion Corp. (APCC: Research, Estimates), a leading maker of power supplies and surge protectors for computers and other electronic gear, slumped 20-11/16 to 25-13/16 after it warned its third-quarter earnings will fall short of expectations.
The company reported second-quarter earnings of 29 cents a share, in line with estimates but up from the 22 cents a share in the same period last year.
Other major tech issues sold off. WorldCom (WCOM: Research, Estimates) fell 2-3/4 to 36-9/16, Cisco (CSCO: Research, Estimates) shed 5-3/16 to 62-13/16, and JDS Uniphase (JDSU: Research, Estimates) fell 12-3/8 to 116-1/4.
 The upscale retailer Nordstrom (JWN: Research, Estimates) warned that second-quarter earnings will miss Wall Street forecasts of 55 cents a share by about 14 cents due to weaker-than-expected sales and aggressive discounting. Nordstrom shares fell 4-1/16 to 18-1/8.
And financial issues also took a hit. Troubled financial services firm Conseco (CNC: Research, Estimates) fell 15/16 to 8-1/2 after it reported an operating loss of 9 cents a share, far weaker than the 28 cents a share in earnings forecast. The company also pulled its Conseco Finance unit off the market -- choosing instead to restructure the division, eliminating about 2,000 jobs, and selling off other assets.
 Bank of America (BAC: Research, Estimates) shed 1/4 to 46-1/2 after it said it plans to cut its work force between 9,000 and 10,000, or 6-to-7 percent, as part of a cost-cutting measure.
Concern about interest rates crimped the Dow. J.P. Morgan (JPM: Research, Estimates) fell 1-3/4 to 130-7/16, Citigroup (C: Research, Estimates) lost 1-5/8 to 68-5/16, and American Express (AXP: Research, Estimates) shed 2-1/2 to 55-13/16.
"You can't have it both ways -- the economy can't be strong and have us worrying about revenue growth going forward, so it has to be the trend is slowing and how much that affects equity valuations going forward," said Jefferies' Hogan.
Investors wary of economic data
The Federal Reserve's monetary policy-making body meets again on August 22 and after six interest rate hikes over the past year, investors are hungry for any indications that the economy is slowing and the Fed is ending its tightening cycle.
Besides the GDP growth rate, the report released by the Commerce Department showed that a key inflation gauge, the price deflator, rose 2.5 percent, in line with forecasts.
"The good news is that on the consumer side of things, spending actually declined, and the real good news is the deflator was lower than the last quarter and there was a revision from the first quarter. So when you really dissect it all, it wasn't all that bad," said Peter Cardillo, director of research at Westfalia Investments.
First-quarter gross domestic product growth was revised down to a 4.8 percent rate from the 5.5 percent initially reported.
"(The GDP) doesn't justify the slower earnings picture later in the year," said Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum. "There's a little bit of saving grace in there because we're seeing a strong economy still with no dramatic inflationary prospects."
But some analysts were optimistic. Among them, Peter Canelo, U.S. investment strategist for Morgan Stanley Dean Witter, told CNNfn's market coverage that the traditional presidential election year rally will begin once the market senses that the Federal Reserve is done raising interest rates. (389K WAV) (389K AIFF) 
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