NEW YORK (CBS.MW)á-- The Nasdaq Composite logged its third-biggest point decline on Wednesday, shaken as investors abandoned positions in this year's red-hot tech bellwethers such as Cisco Systems and Intel.
Since the tech-driven Nasdaq hit its16th record for the year on March 10, investors have been quick to cash in profits on tech shares. Selling was exacerbated Tuesday after Goldman Sachs investment strategist guru Abby Joseph Cohen said she no longer recommended an overweighted position in the technology sector.
The composite plunged 189.21 points to 4,644.68 on Wednesday, leading some analysts to believe the closely watched sector could be losing some of its market influence.
"It's the end of the quarter and maybe tech is not going to be quite as dynamic a leader in the market as it has been," said Bill Rhodes, chief investment strategist at The Williams Capital Group
Market analysts said the tech sector also lacked support from the end-of-quarter buying spree that had contributed to big gains in recent weeks.
"Window dressing ended yesterday," said Jim Meyer, head of equity research at Janney Montgomery Scott. "The investors who were buying the Ciscos, Intels and Sun Microsystems of this world for the last week to dress up their portfolio stopped yesterday and allowed selling pressure to come in."
Cisco Systems (CSCO: news, msgs) traded off 1 3/16 to 76 1/16. That's about 6 points off a 52-week high ofá82, set earlier in the week. The company said its buying privately-held SightPath, a provider of products to create intelligent content-delivery networks, for $800 million in stock. See full story.
Intel slid 3 13/16 to 131 7/8, retreating from a corporate record high of 145 3/8 set just last week.
The Internet sector was the hardest hit. The Amex Internet Index fell 5 percent, and the 17-stock Goldman Sachs Internet Index plunged 7.5 percent. However, shares of ExciteAtHome (ATHM: news, msgs) gained 3 3/8 to 37 11/16 after AT&T moved to increase its control of the high-speed Net-access service. See full story.
The Philadelphia Semiconductor Index (SOX: news, msgs) slid 5.3 percent, extending losses from a 3.4 percent drop in the previous session. The Goldman Sachs Computer Hardware Index (GHA: news, msgs) tumbled 3.8 percent. See Hardware Report.
The Amex Networking Index fell 4 percent, while the CBOE Software Index dropped 4.5 percent.
The Dow Jones Industrial Average (INDU: news, msgs) defied the tech weakness and rose 82.61 points to 11,018.72. Component Microsoft (MSFT: news, msgs) gained 2 7/8 to 107 3/16. See Market Snapshot.
Not so chipper
Semiconductor stocks weren't looking too chipper, thanks to weakness in shares from companies that make programmable logic devices, orá integrated circuits that manufacturers can program to perform specific functions. Lattice Semiconductor (LSCC: news, msgs) fell 2 13/16 to 69 3/8; Altera (ALTR: news, msgs) gave back 2 13/16 to 84 7/8; Xilinx (XLNX: news, msgs) fell 4 7/16 to 80 7/16.