(April 4) – “During the first three months of the year, many investors wondered how much worse things could get in the stock market. They are getting their answer, loud and painfully clear, in April,” writes Gretchen Morgenson in today’s New York Times.

“Technology stocks, which have taken the brunt of this bear market’s beating, endured more punishment yesterday. The Nasdaq composite index lost 6.17 percent as investors dumped shares of software companies and telecommunications concerns. The Nasdaq is now down 32.3 percent for the year.”

|But the selling also spread to the Dow Jones industrial average yesterday, which lost 292.22 points, or almost 3 percent of its value. Only one of the 30 stocks in the Dow registered a gain – Home Depot.”

“The decline in the Dow appears to represent a shift away from the view, held by many investors, that the bear market could remain relatively contained to technology shares. Such a sentiment had helped keep the Dow Jones industrial average – with its broad array of companies from a variety of industries – afloat in the Nasdaq storm. Now the Dow is being buffeted by sellers who seem to think there is no haven in United States stocks, after all.”

“Adding to some investors’ unease yesterday was the heightened dispute between China and the United States over the collision of a Chinese fighter and a Navy intelligence plane, and the status of the American crew and aircraft in Chinese hands.”

“James W. Paulsen, chief investment officer at Wells Capital Management in Minneapolis, said: ‘Until late February, the entire stock market was just correcting the technology bubble. Now, this has broadened out to be not just a tech decline but looking more like a full-blown recessionary decline.’ “

“Technology shares continue to tumble as demand wanes for Internet routing equipment, cellular telephones and fiber optic cable. Fears of rising bankruptcy filings among smaller telecommunications concerns have infected industry giants like Nortel Networks, Lucent Technologies and Qualcomm. All three hit new 52-week lows yesterday.”

“In the last two days alone, the Nasdaq composite index is down more than 9 percent, closing yesterday at 1,673. It has lost more than two-thirds of its value since it reached a close-of-trading-session peak of 5,048.62 on March 10, 2000.”

“Investors fleeing the carnage took refuge earlier this year in shares of companies selling goods and services to consumers, who have continued to spend. Technology expenditures might fall, their thinking went, but surely the consumer could again be relied on to pick up the slack and keep the economy out of recession.”