Technology stocks in the US and Europe took another battering on Thursday, this time prompted by a profits warning from computer maker Gateway and further evidence of a weakening US economy.

At one point in the early afternoon in New York, the Nasdaq composite index - which reflects the value of tech firms - was down nearly 7% on the day, and had plunged to just half its value from from the high point of 5,048.6 it reached on 10 March.

At the close of the session, the Nasdaq had reached another 52-week low and was down 4% at 2,598.

I The picture was not much brighter for the more established firms which make up the New York Stock Exchange's Dow Jones Industrial Average - it finished down 2%, or 214 points at 10,414.

It was the biggest volume ever on the New York Stock Market.

There were 880 new lows on the high-tech Nasdaq index, while some of the biggest names in technology are now worth less than half their market value just a few months - or even days - ago.

The Nasdaq has fallen for 9 of the last 10 trading sessions.

Since March, the value of Cisco Systems - once the world's biggest company - is down 41%, while Microsoft and Intel are worth 50% less.

British Telecom slips

The losers on Thursday were led by Gateway - down 36% - which warned that its profits would not reach the levels analysts expected.

Other computer makers were pulled down with it - Dell slipped 8%, Compaq 13% and Hewlett Packard down 7%.

In Europe technology shares led the main indexes lower, with London's Techmark 100 index set to close at a new low for its one year life, having slumped a further 4%.

Among those continuing to suffer was British Telecom, which slipped below �6 per share for the first time since March 1998.

The scale of the dot.com carnage was highlighted as a string of tech firms hit fresh lifetime lows.

These included the European auctioner QXL, down to 17p from a high points of 778 nine months ago.

The tech fallers also sent the FTSE 100 down 20.8 points to 6,111.2 by 1436.

Gateway hit

Germany's Dax index was 131 lower at 6,467.3 and France's Cac 40 was standing 138.7 lower at 5,921.9. Their technology indexes were both 4% lower.

Personal computer maker Gateway announced after the markets closed in America on Wednesday that it expected fourth-quarter sales and profits to be significantly lower than expected after analysing its sales over the Thanksgiving weekend.

Gateway is the fourth biggest maker of personal computers for the US market.

It expects to report revenue of about $2.5bn for the fourth quarter, about $500m below previous estimates.

Gateway is the latest in a long list of technology companies to issue a warning that profits may not match expectations as consumer spending slows ahead of the crucial Christmas selling season.