Wall Street: Monday close

A PLUNGE in

The Dow Jones Industrial Average dropped 133.47 points or 1.44% to 9109.79, off 8% year to date. The Nasadaq Index tumbled 59.45 points or 4.06% to 1403.76, a new five-year low and bringing its losses to roughly 30% since 1 January.

WorldCom's shares plunged 77 cents or 93% to six cents, down from near $100 within the past three years. Its market value is now $200m, down from $200bn at its peak and $2.3bn last Tuesday - just before it revealed the accounting scam. WorldCom's chances of avoiding bankruptcy appeared to shrink after it conceded it was in default on its borrowings, the Nasdaq market said it would delist its shares at week's end and the company said it had widened its probe to include financial years 1999 and 2000.

'I'm shellshocked,' said Donald Selkin, director of equity research at investment firm Joseph Stevens. 'You've not only got post-September 11 lows for the Nasdaq but the lowest close in five years.'

There were some voices in the analyst community urging investors to buy shares at current prices because the selling had been overdone. 'Unless the entire corporate world has cooked the books and this is not just isolated to a relatively few aggressive companies, then we think the latest selling is probably overdone and that the worst is behind us,' said Mark Arbeter, chief technical analyst at Standard & Poor's MarketScope. Other analysts said they would delay buying until they saw a shake-out in the market possibly linked to additional accounting bombshells.

Investors seemed to be in two minds about jumping back into companies caught up in the focus on alleged management malfeasance. Xerox, which late last week admitted that it had inflated its revenues by more than $6bn over five years, fell another 12 cents or 1.7% to $6.85.

ImClone Systems, the troubled pharmaceuticals company, slid 90 cents or 10% to $8.46. Martha Stewart Living, which has been dragged into ImClone insider selling allegations, finished fractionally higher at $11.50, down from $20 in May. Conglomerate Tyco International, which faces official investigations, rose 24 cents or 1.8% to $13.75.

Companies which have their bookkeeping questioned also saw selling. IBM was knocked down $4.40 or 6% to $67.60, General Electric shed 60 cents or 2% to $28.45 and News Corp dipped 68 cents or 3% to $22.25.

Defence systems maker TRW fell 40 cents or 0.7% to $56.58 after it agreed to be bought for $7.8bn by rival Northrop Grumman. BAE Systems had been considering bidding for some or all of TRW's assets.

3M, the maker of Scotch tape and Post-It notes, jumped $4.40 or 3.6% to $127.40 after it comfortably topped financial forecasts. French media giant Vivendi leapt 98 cents or 5% to $22.48 on reports that its controversial chief executive Jean-Marie Messier had been ousted.