The broader Standard & Poor’s 500 index fell 17.15 points, or 1.7 percent, to 989.13.
The technology-laced Nasdaq composite index was down 23.8 points, or 1.62 percent, at 1,440.95.
The CNET Tech Index fell 21.21, or 2.09 percent, to 1,009.23.
Merck said the Medco unit acted properly.
Lehman Bros. also trimmed its earnings estimates for IBM for 2002 and 2003.
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