While the Nasdaq composite index and the Dow Jones industrial average saw their biggest point swings to date yesterday, the index of leading Maryland companies ended the day with a bigger percentage drop.
The Sun-Bloomberg Maryland index of the top 100 Maryland stocks lost 9.56 points yesterday -- down 3.74 percent -- to close at 246.04, after a 4.8 percent loss Monday. The Nasdaq and the Dow respectively were down 1.77 percent and 0.51 percent yesterday.
The Maryland index rose 54 percent in the first two months of this year, setting a record 347.07 March 6. But it has fallen steadily since then, marking its biggest one-day loss -- 7.46 percent -- March 14, as investors turned away from technology and biotechnology issues.
Aether Systems Inc., an Owings Mills wireless data company, led the list of decliners yesterday, dropping $24.50 -- nearly 16 percent -- to close at $129.50. The stock vaulted to a high of $345 on March 10, but has fallen 62 percent.
Ciena Corp., the Linthicum telecommunications equipment maker, fell $11.75 to close at $102.125, down 42 percent from $177 March 1. PE Corp.'s Celera Genomics Group, the Rockville gene-mapping concern, closed at $73.625, down $7.375 -- 70 percent off its March 6 close of $247.
"We had today what I would term a panic in technology stocks and in the broader Nasdaq -- at one point a loss approaching 15 percent for the day," said Larry Puglia, manager of T. Rowe Price's Blue Chip Growth Fund and its Financial Services Fund. He said Monday's ruling against Microsoft Corp. is still rippling through the market.
"A certain number of stocks had reached valuations where there was little room for error or unsettling news, and I think the Microsoft news is an obvious catalyst that created a major downdraft in the Nasdaq market," Puglia said. "It reflects an activist government, or more aggressive use of government power to regulate the markets. And I think any time you have that situation, it tends to cause volatility in the market."
Not all the news was bad for Maryland stocks. The top gainer was Visual Networks Inc., the Rockville telecommunications software company, whose shares rose nearly 9 percent to close at $57.50, up $4.625.
MedImmune Inc., the rapidly expanding Gaithersburg biotechnology company, rose $3.875 to $170.125, and inventory management software company Manugistics Group Inc. of Rockville closed at $42.75, up $3.875.
Jim Hardesty, president of Hardesty Capital Management Inc. in Baltimore, said investors who had been "investing in hope" are now seeking companies with strong fundamentals.
"Most companies [that fell yesterday] are in the relatively early stages of their lives and they have yet to turn consistent profits," he said. "Some have amazing prospects, such as genetic mapping and wireless services, but in a market such as this, [investors] are fleeing toward higher-quality companies with earnings."
Hardesty said Federal Reserve Chairman Alan Greenspan, who has publicly worried over high stock valuations and has raised interest rates in hopes of slowing the economy, "got his wish, but it came at Easter instead of Christmas."