More instability on Hong Kong's Hang Seng Index and unprecedented selling gripped Wall Street, forcing the Dow down 554.26 points, or 7.2 per cent, to 7161.15 and the NASDAQ down 115.44 points, or 7 per cent, to 1535.48. Tech stocks were especially hard hit, with Compaq Computer Corp. dropping $8.25 per share to $60.50 and Dell Computer Corp. plummeting $12.19 per share to $81.75. "Well, we can't say we've seen worse days," said Louis Mazzucchelli, an analyst at Gerard Klauer Mattison. "What we have here is an interesting confluence of negative sentiment from virtually every source. Emotion took control of the markets today." The 554-point loss eclipsed the previous record set on Oct. 19, 1987 when the Dow shed 508 points. But the 22 point percentage drop that day was much worse than today's beating. Monday's debacle follows another collapse in the Hong Kong market. The Hang Seng Index fell nearly 6 per cent overnight, igniting a replay of last week's worldwide market retreat. Because of the 1987 crash, the Securities and Exchange Commission instituted measures to prevent a complete market meltdown, measures that had never been employed until Monday. Under the measure, trading in all indexes is halted if the Dow falls 350 points in one day. Trading in the NASDAQ was halted for the first time ever Monday, capping off a sharp plunge in technology stocks and a more than 350-point drop in the Dow. Trading was first halted at 2:36 p.m. EST, a NASDAQ spokesman said, under the rule that was instituted following the 1987 stock market crash. By the time trading was halted, the Dow had fallen about 354 points - or 4.59 per cent - to 7361.04. Traders said concern over weakening economies in Asia led to the drop in stocks across the board in U.S. markets, as well as in other world stock markets. Trading in some Latin American markets, including Mexico, was also halted. "The rule is sort of a relief valve," Mazzucchelli said. "It's supposed to give people time to cool off and regain their composure, but today I think it just gave people more time to decide what stocks they'd sell next." Once trading resumed, the rate of loss only increased. Finally, the SEC stepped in again and halted trading for the day at 3:30 p.m. EST. "Nobody is on their window sills yet, but this has gotten much worse than anyone expected," said Peter Skalla, an analyst at Olde Discount Corp. "The currency fluctuation in Asia is a real problem, especially for technology companies, because as the dollar gets stronger it will be harder for Asian firms to buy American technology." The currency crisis in Asia is especially bad news for technology firms. "If the dollar becomes too strong, companies will have to cut their prices to move their inventories," Skalla said. "Obviously, when you cut the margins, you cut the profits. Right now, investors are saying 'Thanks for the ride, but I get off here.'" Analysts said Monday's dramatic slide would probably be followed by a strong recovery Tuesday as investors look to grab solid stocks at bargain prices. But, they said, a drop of this magnitude will make investors and their brokers much more selective. "This is the end product of investors and institutional brokers who thought the good times would never end," said Louis Ehrenkrantz, an analyst at Ehrenkrantz King Nussbaum. "The days of buying for buying's sake are over. When you have companies, particularly Internet companies, selling stock at $40 or $50 a share that are losing tens of millions of dollars a quarter, you know there's a problem." Technology issues were nailed for the third consecutive day. Intel Corp. shares were down $5 per share to $75. Digital Equipment Corp. was off $5.25 per share to $45.25. IBM slid $8 per share to $90. Among networking firms, Cisco Systems lost $6.56 per share to $73.69 while 3Com Corp. and Bay Networks Inc. were down $2.94 per share and $3.38 per share, respectively. The NASDAQ stood down 90.72 points - or 5.50 per cent - at 1560.20 by 3:00 p.m. EST. Telecommunications stocks met the same fate as MCI Communications Corp. was down $1.94 per share to $35.38, WorldCom Inc. lost $1.25 per share to $32.50 and GTE Corp. was off $3.13 per share to $41.18. "It's really crazy," Mazzucchelli said. "I mean, does Dell deserve to be down $12 per share? Probably not. But it does deserve to be down some. That's what people are trying to figure." Microsoft Corp. was off $5.63 per share to $129.75 but Apple Computer Inc. actually was up 19 cents per share to $16.75 on speculation that Steve Jobs might assume the CEO post. Silicon Graphics Inc., which is expected to announce a restructuring plan after the markets close that could include the resignation of CEO Ed McCracken, was down $2.13 per share to $15.25. So what will Monday's nightmare mean for the future of technology stocks? "We are not certain if we are following or now leading world markets lower," said Joseph Barthel, chief investment strategist at Fahnestock & Co. "It's very hard to envision that the market will rebound." Call it superstition or fear of Halloween or maybe just a complete coincidence, but October has a history of disastrous trading days. For the Dow, October has been the most dangerous month - it's the month of the great stock-market crashes in 1929 and 1987, plus numerous other jolts over the decades, such as the one caused by the Cuban missile crisis in 1962 and the mini-crash of 1989. Of the 20 largest daily percentage drops in the industrial average, eight have occurred in October, including the three - now make it four - biggest. Reuters reports contributed to this report.