The stock of technology stalwarts like Apple, Cisco, Intel, and Dell ran into a buzz saw Monday as panicked investors moved to the sidelines after Lehman Brothers announced plans to file for bankruptcy and Bank of America rescued Merrill Lynch in a $50 billion deal.

The carnage from the long-running subprime mortgage crisis also left American International Group on the precipice, seeking a buyer for at least some of its units in an effort to shore up its balance sheet.

At Monday’s close, the Dow Jones Industrial Average lost 504 points, or 4.4 percent, and the Nasdaq tumbled 81 points, or 3.6 percent. The Morgan Stanley High Tech Index lost 3.4 percent, but several hardware stocks took an even worse drubbing.

In the thick of the carnage, Apple plummeted $8.58, or 5.8 percent, to $140.36 and Research In Motion, maker of the BlackBerry smartphone, dropped $7.40, or 7 percent, to $98.27. Adobe Systems dropped $2.39, or 5.9 percent, to $38.08 and Dell slid $1.05, or 5.5 percent, to $17.99. Other big losers included: Motorola, down $.48, or 5.9 percent, to $7.65; Cisco Systems, down $1.08, or 4.6 percent, to $23.38; and Infosys Technology, down  $2.44, or 6.6 percent, to $34.80.

Taking a lesser hit were Yahoo, down $.23, or 1.2 percent, to $18.85; Microsoft, down $.80, or 2.9 percent, to $26.82; and Google, down $3.80, or .9 percent, to $433.86.

After the close, Hewlett-Packard, whose stock fell 3.5 percent to $45.33, said it plans to cut more than 24,600 jobs over three years as part of its acquisition of computer services firm Electronic Data Systems.

Companies use stock as currency in several ways. They issue stock to raise capital, employ stock for acquisitions, and use stock grants and options to compensate employees.

If publicly traded technology stocks are retrenching, that could have a negative effect on private companies backed by venture capital. The publicly traded companies might be less inclined to acquire privately held companies backed by VCs. When deals are done, the venture investors might receive a lower valuation in a depressed technology sector. That would add to a publicly declared "crisis" by a venture capital trade group because of this year's dearth of initial public offerings.


In a news conference, Ken Lewis, chief executive of Bank of America, said their was "absolutely no pressure from the regulators" to complete a deal for Merrill. Earlier this year, Washington officials brokered a deal that led JP Morgan Chase to acquire failing investment bank Bear Stearns.

In the same news conference, John Thain, chief executive of Merrill Lynch, said discussions on the deal began Saturday morning. With Bank of America doing due diligence and Merrill doing "reverse due diligence," Mr. Lewis said, "it was a very intense time."