NEW YORK (CNNfn) - The high-flying Nasdaq composite index suffered its fourth-biggest point loss in history Monday on concern that Japan's latest economic stumble will hurt profits at technology companies.|
Analysts also linked the Nasdaq's fall to its own success. The tech-heavy index set 16 record highs this year, the most recent on Friday, giving investors cause to lock-in profits.
"I don't know if 'bailing' is the right word, maybe profit-taking is more like it," Tony Dwyer, market strategist at Kirlin Holdings, told CNNfn's market coverage. "You have to take into account how much the Nasdaq is up."
But the Dow Jones industrial average, off more than 14 percent in 2000, inched higher, as money moved into J.P. Morgan and Dupont -- both stocks cheapened by that sell-off.
The Nasdaq tumbled 141.38 points, or nearly 3 percent, to 4,907.24. But the plunge's worst levels proved short-lived; the Nasdaq fell as much as 209 points Monday.
The Dow, meanwhile, rose 18.31 points to 9,947.13, rebounding from as much as a 193-point drop in the first minutes of trading.
The broader S&P 500, meanwhile, lost 13.18 to 1,381.92. It was off by as much as 31 points Monday.
More stocks fell than rose. Losers on the New York Stock Exchange beat winners 1,882 to 1,147. Volume topped 991 million shares. Nasdaq decliners beat advancers 2,874 to 1,454. More than 1.7 billion shares changed hands.
Treasury securities rose while the dollar fell against the yen and euro.
Japan news ignites global sell-off
Japan, the world's second-largest economy, contracted at a 1.4 percent rate between October and December, officially pulling it back into recession. A global market sell-off followed.
The news sparked fears that a slowdown in demand could crimp earnings, particularly among technology companies reliant upon exports. U.S. technology companies exported $16 billion in goods to Japan last year, according to the American Electronics Association.
Still, many analysts said the over-bought Nasdaq, which closed above 5,000 Thursday for the first time and has doubled in the past 13 months, was vulnerable to profit taking.
"The Nasdaq (was) certainly overdue for a reality check," Howard War, portfolio manager at Gabelli Funds, told CNN's Street Sweep.
Some of the Nasdaq's biggest movers and best performers took a breather Monday. Microsoft (MSFT: Research, Estimates) fell 3 to 98, Oracle (ORCL: Research, Estimates) shed 2-7/8 to 78-3/4 and Qualcomm (QCOM: Research, Estimates) lost 3-25/32 to 132-1/16.
But Dell Computer (DELL: Research, Estimates) and Intel (INTC: Research, Estimates) rose after receiving positive brokerage comments. Banc of America raised Dell to "strong buy" from "buy" and Bear Stearns upped it to "buy" from "attractive." Robertson Stephens, meanwhile, lifted Intel "to strong buy" from "buy."
Dell surged 3-1/4 to 54-1/2 and Intel jumped 4-5/8 to 127-7/8.
The Dow had some notable gainers.
J.P. Morgan (JPM: Research, Estimates) jumped 5-15/16 to 112 and DuPont (DD: Research, Estimates) rose 2-1/2 to 48-7/16.
Dow member Procter & Gamble (PG: Research, Estimates), whose earnings warning last week knocked off more than 30 percent of the company's market value, finally drew buyers Monday. P&G rose 3-1/4 to 57.
Clark Yingst, market analyst at Prudential Securities, told CNN's In the Money he sees out-of-favor "old economy' stocks recovering in the months ahead. (492K WAV) (492K AIF).
Tribune buys Times Mirror
In the day's deals, Tribune Co. (TRB: Research, Estimates) fell 6-3/8 to 30-13/16 after agreeing to buy Times Mirror Co. (TMC: Research, Estimates) in a cash and stock deal valued at approximately $8 billion. Times Mirror surged 37-11/16 to 85-5/8.
Aetna Inc. (AET: Research, Estimates) lost 5-1/4 to 50-3/4. The largest U.S. life and health insurer said Sunday it declined a $10 billion takeover offer from Wellpoint Health Networks Inc. and ING America Insurance. Aetna decided to split itself into two public companies.
General Motors Corp. (GM: Research, Estimates) held steady at 77-13/16 after the world's biggest automaker disclosed a strategic alliance with Italy's Fiat SpA's auto unit.
Software maker i2 Technologies Inc. (ITWO: Research, Estimates) sank 16-13/16 to 191-3/16 after disclosing plans to buy business-to-business solutions provider Aspect Development Inc. in a $9.3 billion stock swap. Aspect Development Inc. (ASDV: Research, Estimates) (ASDV: Research, Estimates) jumped 11-13/16 to 96-13/16.
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