NEW YORK (CNN/Money) - Stocks turned in another woeful performance Tuesday as accounting and terrorism worries sent investors scrambling to sell with just one full session left in a holiday-shortened week.

The declines extended a six-week-long losing streak on Wall Street, and marked another five-year low for the Nasdaq composite index, which fell below its post-Sept. 11 closing low on Monday. The Standard & Poor's 500 index also dropped below its post-terror attack low to a level not seen since mid-January 1998.

"Basically we're holding our breath and seeing what happens on the Fourth," said David Briggs, head of equity trading at Federated Investors, referring to fears of a possible terrorist attack against the United States on Independence Day.

Such fears kept many investors from buying ahead of the holiday, market analysts said. Financial markets are closed Thursday for the Fourth of July and will wrap things up early on Friday.

While the Dow Jones industrial average -- the world's most widely watched stock index -- sank 102.04 points to 9,007.75, a loss of 1.1 percent, it was the Nasdaq that stole Tuesday's show. The tech-heavy index tumbled 45.98 to 1,357.82, a 3.3 percent decline that left it at its lowest since mid-1997, when Bill Clinton was president and Wall Street's fascination with the Internet was just gaining momentum.

The Standard & Poor's 500 index sank 20.56 to 948.09, a loss of 2.1 percent.

"If nothing happens, we'll be back on Friday, and if something does happens, my guess is the markets won't even open on Friday because it would be stupid to do so," said Briggs, referring to a possible attack.

U.S. intelligence officials say there are signs terrorists may strike at the United States again this summer but that they have no specific evidence pointing to an attack this week.

Alexis Glick, head of floor operations at Morgan Stanley, told CNNfn's Street Sweep that the markets will continue to suffer until corporations start to give investors something to smile about.

"Next week we'll start to see some companies come out [with earnings], and hopefully we'll start to see some reacceleration of growth and some good news," Glick said. "Secondly, as the New York Stock Exchange has come out with the corporate governance and listing standards, I think we need things like that to create some accountability."

A week after WorldCom rocked Wall Street with the biggest accounting scandal so far, CEO John Sidgmore apologized to investors, vowed to cooperate with regulators and said the company -- unlike Enron, which is struggling in bankruptcy -- would recover. He indicated a bankruptcy filing wasn't imminent but also refused to rule one out.

A day after WorldCom (WCOME: up $0.04 to $0.10, Research, Estimates) shares set a record for the most traded in one session, shares of Vivendi Universal (V: down $4.69 to $17.76, Research, Estimates) tumbled after a newspaper reported that the media company tried to inflate its 2001 accounts -- as the accounting scandal moved across the Atlantic.

Technology shares struggled as Merrill Lynch reduced its revenue projection for Dell Computer (DELL: down $0.62 to $24.54, Research, Estimates) for the second half of this year, in keeping with its lowered industry view. The estimate was cut to $34.2 billion from $35 billion. But Merrill kept its full-year earnings estimate intact at 77 cents a share, and its subsequent-year forecast at 95 cents a share.

In addition, Morgan Stanley cut stock price targets and/or earnings-per-share estimates for a variety of chip-equipment companies, saying it believes a recovery still is under way but that growth estimates are unrealistic. Among the companies hit: Applied Materials (AMAT: down $1.06 to $16.97, Research, Estimates), Novellus Systems (NVLS: down $3.16 to $28.97, Research, Estimates) and KLA-Tencor (KLAC: down $1.12 to $40.20, Research, Estimates).

Software warnings also weighed on techs. Advent Software (ADVS: down $7.21 to $17.04, Research, Estimates) said late Monday that its second-quarter revenue would miss its previous expectations, citing the current economy and a delay in closing its purchase of software maker TechFi because of a government antitrust investigation.

Software tools maker Rational Software (RATL: down $0.10 to $7.35, Research, Estimates) fell after the company said it will miss expectations for the second quarter. It also said it now expects to see fiscal first-quarter earnings of 3 or 4 cents a share, rather than the previously expected earnings of 5 or 6 cents per share.

And Siebel Systems (SEBL: down $0.79 to $12.57, Research, Estimates) fell close to its 52-week low after the company was downgraded by Wachovia Securities to "buy" from "strong buy."

The Nasdaq fell 4 percent Monday and has lost about a quarter of its value since the start of 2002.

CIT Group (CIT: down $1.00 to $22.00, Research, Estimates), the financial services unit of Tyco International (TYC: down $1.10 to $12.65, Research, Estimates), fell below its offer price in its first day of trading. The company raised $4.6 billion in an initial public offering Monday, pricing 200 million shares at $23 each, below the $25-to-$29 target range.

Market breadth was negative. On the New York Stock Exchange, decliners topped advancers by 3-to-1 as 1.81 billion shares changed hands. Nasdaq losers also beat winners by nearly 3-to-1 on high volume of 2.65 billion shares.

The weakness in the Nasdaq hurt European markets, which finished near nine-month lows. Asian-Pacific stocks finished mixed Tuesday, with Tokyo's Nikkei index edging up 0.3 percent.

Treasury prices were higher, pushing the 10-year note yield down to 4.73 percent. The dollar strengthened against the euro, backing further away from parity, and was little changed versus the yen.

Light crude oil futures fell 2 cents to close at $26.77 a barrel in New York. Gold closed down $1.20 at $313.20 an ounce.