TOKYO — Japan's main stock market nose-dived for a second day today on growing investor jitters from "Livedoor shock," the widening criminal investigation at an Internet startup that has sparked a sell-off, especially in technology shares.

The benchmark for the Tokyo Stock Exchange plunged 2.9 percent today in a session that had to be shortened by 20 minutes because of a surge in transactions. The Nikkei 225 index dropped 464.77 points to close at 15,341.18 points, its biggest drop since May 10, 2004.

Share prices extended losses from yesterday, when the Nikkei fell 2.8 percent, following Japanese newspaper reports that the investigation begun Monday was expanding. The index has fallen nearly 6 percent the last two sessions.

"Individual and foreign investors are selling in a panic," said Satoru Otsuka, senior economist at Mizuho Research Institute in Tokyo. "The problem is that we have no idea how the Livedoor problem will unfold."

Investors and the Japanese public alike were stunned when prosecutors marched into the Tokyo headquarters of Livedoor late Monday on suspicion of violation of securities laws by giving false information.

Livedoor offers various Internet services, including access, consulting, telecommunications, mobile sites and software development.

The company is headed by Takafumi Horie, who has risen to celebrity status for his frequent TV appearances and unsuccessful attempts to buy a media conglomerate and a baseball team. Horie, 33, denies any wrongdoing and has pledged to cooperate with authorities.

The Japanese media have dubbed the two-day plunge in Tokyo stocks "Livedoor shock," which has garnered banner headlines.

Technology and electronics firms took a hit today, including Advantest Corp., Canon Inc., Toshiba Corp. and Sony Corp.

Those losses could also be partly attributed to investor reaction to earnings results Tuesday from U.S. chipmaker Intel Corp. and Web giant Yahoo Inc., which were lower than analysts' expectations.

The Tokyo Stock Exchange issued a warning in the early afternoon that it handled 2.32 million transactions in the morning session and would stop trading if the system limit of 4 million transactions was reached.

Total trading volume, which is a higher measure because each transaction typically involves many shares, was 3.28 billion on the first section, up from 2.465 billion yesterday.

Livedoor's shares were suspended briefly during morning trading. Livedoor's stock fell 14.4 percent yesterday, the maximum amount allowed, to 596 yen ($5.18). They closed unchanged today.

Kyodo News agency reported the fresh probe today, but neither Livedoor nor the Tokyo Prosecutors Office could confirm that report.

The national daily Yomiuri Shimbun reported today Livedoor is suspected of concealing a 1 billion yen ($8.7 million) deficit for the full-year results ending September 2004.

The broader Topix index of all shares on the first section fell 56.94 points, or 3.49 percent, to 1,574.67. The Topix dropped 38.54 points, or 2.31 percent, yesterday.