The Last of the Red-Hot Sectors Gets Iced

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After the NASDAQ wrecking ball made another pass Wednesday, taking the tech index down 190 points, or 5.56 percent, to 3229 — the seventh largest percentage drop of the year — the good news is that there isn't much left standing.

Set in motion by a disappointing earnings report from Canadian communications firm Nortel, released after the bell Tuesday, the index went vertical at the bell Wednesday and staggered downward until closing time. And the day's big losers — Nortel, JDS Uniphase, Sycamore Networks and Ciena, which all dropped 20 percent or more — had one thing in common. Two words, Ben: Fiber optics.

Largely spared by the violent sell-offs of the past few months, fiber optics — which tends to overlap with networking companies like Cisco and Juniper Networks — was considered by NASDAQ types to be "one of the last bastions of strength in the market," in the words of one analyst. Not any more.

And at midday Thursday, the sellers weren't done yet. Juniper Networks, one of the high-flying bellwethers of the sector (which has lately been a sometime bellwether for the rest of NASDAQ), dipped below $200 during Wednesday's bloodbath and kept on going, hitting $170 at noon Thursday. Corning (more than oven-safe dishes, folks!) is below $70 and off more than 30 percent on the week. Cisco is back down in the very low fifties.

But Thursday's selling didn't have the resolute quality of the day before — it was a halting affair all morning and seemed to be sputtering by lunch. The 3200 (OK, 3100-ish) mark is still a tech milestone investors take quite seriously, probably more so if it holds up this week. Chipmakers, PC makers, software makers, portals — they've all gotten a comeuppance in the last month or so, and this week it looks like fiber optics/networking, the "infrastructure" companies of the Internet, is getting its fair share.

In the search to find a bottom by leveling anything that stands tall, that qualifies as an encouraging sign.