Investors unloaded stocks for a second straight session after eBay's (NASDAQ:EBAY) disappointing fourth-quarter earnings report and mediocre outlook raised new concerns about a slowdown in corporate profit growth.
Shares of the Internet auction giant tumbled in early trading after the company's fourth-quarter profits came up a penny short of analysts' average estimates, due to higher advertising costs and increased investment. The company also slashed its first-quarter outlook, causing a slew of analyst downgrades.
Ebay plunged nearly 20% at mid-session, leading a sharp drop in the Internet sector which also weighed heavily on the technology index. The Nasdaq Composite hit a nadir of 2,048 shortly after 1:00 PM EST. The blue-chip Dow Industrial Average was off 63 points at 10,476, while the broader S&P 500 Index fell 9 points to 1,175.