Tech stocks take beating as Wall Street nosedives

Web companies and Internet infrastructure providers were among the worst hit in Friday afternoon's huge technology sector sell-off.

But the the old economy stocks were routed, as well.

Both the Dow Jones industrials and the Nasdaq composite index took a nosedive as inflation fears triggered off a huge selling spree.

The Dow Jones industrial average tumbled at one point by 703 points before closing down 620.18 at 10,303.29. The technology-laden Nasdaq index dove 410 points, but recovered a bit, to close down 357.23 at 3319.55.

The numbers are a far cry from Dow's January high of 11,722.98, and Nasdaq's March high of 5,048.

The biggest loser among tech stocks was Fibre Channel internetworking vendor Emulex, which lost almost 50% of its value to close at just over $41.

Analysts' consensus was that the sell-off was triggered by the Labor Department's Consumer Price Index report, which showed a greater-than-expected increase in March consumer prices.

"Inflation came in much worse than expected," causing already skittish investors to dump their stocks, said Ashok Kumar, an analyst with US Bancorp Piper Jaffray in Menlo Park, California.

"People were not willing to step in and buy irrespective of the price," Kumar said. "There is more downside to come - typically such a dramatic correction takes time to heal," he added.

Taking the full brunt of investor anxiety this afternoon were several popular Internet stocks that as recently as this January seemed unstoppable.

Among them were Yahoo, which dropped nearly 15% to $116, and CMGI International, which sunk 22% to $51. Even Amazon.com lost over 4.5% of its value, ending at just over $45 compared to the 12-month high of $113 it hit last December.

Also bloodied badly were Internet infrastructure technology vendors such as Akamai Technologies and Inktomi. Akamai closed at $65, down 26% - a huge difference from the $345 it traded at as recently as January. Inktomi lost nearly 10% of its value to $51.

But Web companies were hardly the only technology stocks to be hit. Blue chips such as IBM, Cisco Systems, Microsoft and Hewlett-Packard all saw significant market erosion today. IBM stock dropped over 6% to $103, Cisco by nearly 7% to $57, Microsoft by nearly 7% to $74 and HP by over 8% to $121.

Sun Microsystems, which reported better-than-expected earnings on Thursday, managed to remain comparatively untouched, despite being one of the most heavily traded stocks of the day on Friday. It closed down 1.6% to just over $76.