Technology shares crashed to their lowest level since the summer of 1999 yesterday in what was the seventh biggest point slide in the Nasdaq composite index's 19-year history
The Nasdaq, the index for major technology shares, closed at 2,332.77, down 178.94, a drop of 7%. The last time the Nasdaq closed below 2,400 was in June of last year and Wall Street is bracing for the index to turn in its worst yearly performance ever, with a 42.7% drop since January and a 54.6% drop since its all time high on 10 March.
Until this year, technology companies had relied on ever increasing share prices to attract the most talented staff and invest in R&D.
More than 2.84 billion shares exchanged hands on Wednesday, Nasdaq's second largest volume day ever, with four stocks falling for every one that gained.
Cisco Systems fared worst, falling $5.25 (more than 12%) to $36.50, although it made a slight recovery from its 52-week low earlier in the day of $35.69. Other tech heavyweights also suffered: Microsoft
fell $3.31 to $41.50, Intel by $1.50 to $31.94 and Oracle by $2.13 to $28.50.
Microsoft also set a 52-week low during midday trading, along with many others, including Dell, Amazon.com, AOL, 3Com and eBay.