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Update An ugly momentum is developing in both the tech-heavy NASDAQ and the blue-chip-rich Dow, with twitchy investors locking themselves into a cycle of buying anything that tumbles and selling anything that rallies. Things looked all right at midday on Thursday, however. Following a bitter day of losses on Wednesday, the NASDAQ posted a moderate gain of 90.59 in midday trading Thursday, while the Dow edged down 72.60, as investors sold Old Economy shares to buy New ones at a conservative rate. Overall, tech issues that reported decent earnings on Wednesday and Thursday posted moderate gains, while those with poor earnings reports continued to slide. So far, so good. Thursday's modest midday rally suggested a sane approach to dot-com mania, with investors responding realistically to market forces and actual numbers, as opposed to the superstitious mass buys and sell-offs to which we have grown accustomed in the past year. But in late afternoon trading, nervous shareholders rushed to sell anything that showed even a modest rally, and so undid the hard-won gains of the day, sending the NASDAQ composite down another 92.85 points to 3,676.78 for a loss of 2.46 percent. The NASDAQ has fallen nearly 770 points thus far this week, and is off 27 percent from its 10 March high of 5,048.62. It closed down 9.65 percent Thursday from its close on 3 January, finally wiping out all of its gains for this year. Worse, as the tech sector slid late Thursday, blue-chip investors caught the willies and also began selling issues on the rise, leaving the DJIA to fall significantly and end down 201.58 to 10,923.55 for a loss of 1.81 percent. Meanwhile the bond market enjoyed a predictable and noticeable lift, with 30-year Treasury bonds rising 9/32, and 10-year Treasury notes up 4/32. The NASDAQ composite had taken a severe pounding Wednesday, recording its sixth-largest percentage loss and its second-largest point loss. Triggered by poor earnings news from Microsoft, the plunge swiftly gathered momentum, dragging an entire complex of dot-com shares into the vortex. Internet service companies posted the worst declines, falling about 10 percent overall. By day's end, the composite had slid 286.39 to 3,769.51 for a loss of 7.1 percent. As usual, the Dow Jones Industrials siphoned off a good deal of the NASDAQ's losses as investors sought refuge in solid Old Economy shares. But dot-com jitters got the better of investors in afternoon trading, leaving the Dow to close off 161.95 at 11,125.13. The Wednesday troubles started when Goldman Sachs lowered third-quarter revenue predictions for Microsoft, citing a reduced demand for PCs. Shares fell 4.50 to 79.38 on a volume of 76.5 million, nearly twice the company's daily average. Microsoft is down 25 percent this month and 32 percent this year, making it what The Register considers a decent bargain well worth looking into. Hewlett-Packard slid 11.31 to 134.50; Intel 8.88 to 121.88; and Cisco 5 to 65. Not quite in bargain range yet, but all worth following in the coming weeks. Chip maker Advanced Micro Devices enjoyed some Good news Thursday after reporting better than expected first-quarter earnings. We note, however, that AMD has yet to depreciate the costs of its new manufacturing plant in Dresden, so we remain not quite impressed. We'd like to have a second look at those earnings returns after the plant has been taken fully into account. Overall, the NASDAQ is a buyer's market. The problem is a plethora of spineless bargain hunters who are selling the minute they turn a quick buck, or, put another way, speculating rather than investing. ®

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