Wall Street report: Mon close

SHARES climbed a wall of worry thrown up by a shock profit warning from

The announcement by IBM, the world's biggest computer maker known as Big Blue for the colour of its packaging, fed into a market already on the defensive due to Saddam Hussein's threat to cut off oil exports for 30 days or as long as it takes Israel to withdraw from Palestinian territory.

But the Dow Jones Industrial Average, down 150 points in early trading, closed off just just 22.56 points or 0.22% to 10,249.08. The Nasdaq Index climbed back from a 50-point drop to finish the day ahead 15.75 points or 0.89% to 1,785.78.

IBM said it expected revenues to fall 35% below the same quarter last year, taking a $200m. bite out of profits in a 'very tough' operating environment. IBM, which has had the happy knack of beating analysts' expectations every quarter since June 1991 under retiring chief executive Lou Gerstner, saw its shares plummet $9.70 or 10% to $87.15, erasing roughly $16bn. in market value.

Analysts said the IBM warning cast further doubt over how quickly techs could expect a profit rebound even in a recovering economy. As if to underscore those uncertainties, shares in Sun Microsystems dropped 21 cents or 2.4% to $8.50. But many of the techs posting losses early in the day came back to close near their highs for the session. Microsoft, did a 4.5% about-face, closing up $1.35 or 2.4% to $57.22 on what at least one analyst ascribed to 'short covering.'

Software maker Computer Associates, which is reported to be under investigation over its bookkeeping, helped the tech sector by predicting that its quarterly numbers would top forecasts. CA's shares rose 83 cents or 4.2% to $20.73.

An early 5% leap in oil prices on the heels of Iraq's threat to oil exports helped ExxonMobil rise 58 cents or 1.4% to $43.21, but that was well below its daily high as petroleum prices lost much of their gains by the close.

The Bush Administration was quoted today as expressing concern that rising oil prices could snuff out economic recovery and re-ignite inflation, which, in turn, could lead to rising interest rates. The scenario, a threatening one to share markets, was mapped out before Saddam Hussein issued his embargo threat. Iraq represents 4% of the world's oil exports, much of it bound for the US.

Some industrial shares fell on the fears that higher energy costs will depress demand. Aluminium maker Alcoa shed 14 cents or 0.4% to $37.86. General Electric backed off 26 cents or 0.7% to $36.84.

A broker warning that its Internet exposure was hurting AOL Time Warner sent its shares falling 47 cents or 2.1% to $21.95, near a new all-time low.