Nasdaq Sags Near Its Low for 2002

Another technology-stock sell-off Tuesday pushed the Nasdaq market closer to its 2002 lows, while the broader market finished modestly lower.

The Nasdaq composite index slid 28.39 points, or 1.6%, to 1,730.29, ending near its low for the session as sellers again hammered many software, Internet and semiconductor shares.

That left the index in danger of falling through its 2002 closing low of 1,716 reached Feb. 21. If it goes through that threshold it would be back at levels last seen in October, when the market was recovering from the three-year lows reached in September.

But many non-tech stock sectors fared better Tuesday, limiting the damage to other share indexes. The Dow industrials eased 47.19 points, or 0.5%, to 10,089.24. The Standard & Poor’s small-cap stock index slipped 0.1%.

Winners and losers were nearly even on the New York Stock Exchange in active trading.

Still, analysts said many investors remain worried that corporate earnings reports are pointing to a much slower recovery in profits this year than had been hoped.

Chemical giant DuPont fell $1.51 to $44.84 after reporting quarterly results and warning that commodity prices remain weak.

“Has the economy turned or is it going back [into recession]? These are questions people are posing right now,” John O’Donoghue, co-head of listed stock trading at Credit Suisse First Boston, told Bloomberg News.

In the bond market, long-term Treasury yields eased slightly after the government bought back $1.5billion in debt maturing between 2019 and 2022, $500million more than analysts had expected.

In other trading, gold prices continued to edge up, with near-term futures adding $1 to $304 an ounce in New York.

Among Tuesday’s highlights:

* Internet-related shares led the tech sector lower after EarthLink said quarterly sales and earnings fell short of Wall Street’s expectations. The stock slid $1.58 to $7.95.

Also dropping were AOL Time Warner, off 76 cents to $19.11, its lowest since 1998; and United Online, down $1.24 to $8.45.

Other tech shares off sharply included Adobe Systems, down $1.72 to $37.06; Rational Software, down $1.06 to $14.43; National Semiconductor, down $1.24 to $32.46; and Broadcom, off $1.44 to $35.46.

* In the telecom sector, which has been hammered in recent days, some stocks rebounded on better-than-expected quarterly reports from wireless companies, including AT&T; Wireless, which rose 84 cents to $8.94. Also, Avaya jumped 82 cents to $6.42. But WorldCom Group continued to plunge, falling 60 cents to $3.41 after its debt ratings were cut.

* Defense shares attracted buyers after Lockheed Martin reported strong earnings. Lockheed jumped $3.08 to $62.20, General Dynamics gained $2.06 to $94.92 and Alliant Techsystems surged $3.43 to $103.93.

* Other stocks gaining on earnings reports included Gillette, up $1.47 to $36.32, and adhesives maker Avery Dennison, up $1.80 to $64.05.

* Shares of home builders surged for a second day on continued optimism about home sales. Centex leaped $3.34 to $58.34 and KB Home gained $1.45 to $50.33.

* Electric-power company shares were mostly higher, led by Calpine, up $1.42 to $13.33; Dynegy, up 95 cents to $29.05; and Duke Energy, up 55 cents to $38.89.

But after the market closed, Calpine said its first-quarter operating earnings will be below expectations, and that it will sell up to 60 million new shares to raise capital.

Market Roundup, C8-9