Amazon Takes A Tumble

Concern about price-cutting and shrinking margins overshadowed the completion of’s first profitable year, sending shares of the online retail giant 7% lower on Wednesday.

And the broader market was battered after the Federal Reserve eliminated language from its policy statement that it can keep rates low for a “considerable period.”

Taken together, the day’s events were enough to cause investors to question stock valuations.

The Nasdaq plunged 38 to 2077, the S&P 500 lost 15 to 1128, and the Dow dropped 141 to 10,468. Volume rose to 1.84 billion shares on the NYSE, and 2.33 billion on the Nasdaq. Decliners led 24-9 on the NYSE, and 23-8 on the Nasdaq. Downside volume was 79% on the NYSE, and 76% on the Nasdaq. New highs-new lows were 292-8 on the NYSE, and 226-6 on the Nasdaq.

After the close, AskJeeves , DoubleClick , Activision , Overstock and Ariba rose on their results, while Veritas , JDS Uniphase , Foundry , Digital River , Internet Security and Extreme fell on their earnings reports.

During the day, a number of stocks posting strong results were able to buck the downtrend.

Broadcom , Flextronics , Avaya , Cymer InfoSpace and Network Associates posted strong gains on the day.

Emulex , Advanced Fibre and RedEnvelope warned.

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