Wall Street report: Monday close

A COMPANY in the stable of Rupert Murdoch's

Gemstar-TV Guide, 40%-owned by News Corp, plummeted $3.20 or 39% to $5 after the International Trade Commission in Washington ruled in favour of four rivals that had challenged some of its patents to onscreen TV programming guides. News Corp shares dropped 42 cents or 1.7% to $24.18.

Murdoch, who recently called News Corp's investment in Gemstar 'a real disappointment,' has been trying, without success, to unseat its founder and chief executive Henry Yuen. Gemstar shares have fallen from $76 when News Corp bought into Gemstar two years ago amid questions about its accounting and patents.

At least one other major media figure was also having a bad day. Martha Stewart, the domestic diva whose media empire includes magazines and TV programming, saw shares in her company, Martha Stewart Omnimedia slide another $3.42 or 21% to $12.55, down 50% from their 52-week high reached late last year.

Media reports questioned Stewart's claim that she sold shares in troubled pharmaceutical company ImClone Systems on a stop-loss order initiated before she heard that the company's major drug application had been blocked by the Food and Drug Administration.

ImClone's former chief executive Sam Waksal was arrested recently and charged with insider trading. Waksal, who once dated Stewart, is alleged to have passed confidential information to at least two unnamed parties. Stewart's paper loss on shares owned in her own company on Monday alone totalled $18m. Her Imclone share sale under investigation amounted to $233,000.

AOL Time Warner touched a new low before rebounding to finish higher by 44 cents or 2.9% to $15.50.

The broad rebound was attributed by some market watchers to an afternoon statement from Microsoft that it would issue its earnings report on 18 July. The rationale was that if Microsoft intended to announce an earnings warning, as had been widely speculated, then it would have done so in conjunction with its latest statement. Microsoft shares surged to finish the day up $1.88 or 3.6% to $54.16. Other major techs along for the ride included Intel, up 60 cents or 3.2% to $19.33, and Cisco Systems, higher by 32 cents or 2.3% to $14.06.

WorldCom, down 31 cents or 39% to 91 cents, fell below $1 for the first time after Salomon Smith Barney analyst Jack Grubman cut his earnings forecast for the struggling telecoms company. Grubman, said to be at the centre of an inquiry into analysts who recommended the shares of companies from whom which they profited indirectly from banking fees, had upgraded WorldCom shares at $15 in January.

A less positive spin on tobacco stocks from Merrill Lynch helped send them lower. Philip Morris was marked down $3.85 or 7% to $48.80 after Merrill analyst Martin Feldman said the legal barrage against the industry was proving more damaging than expected.

Negative news and opinions on pharmaceuticals undercut that sector, although they trimmed their losses in late buying. Merck lost 48 cents or 1% to $49.50.

Analysts said the early broad selling coincided with more weakness in the dollar and eroding confidence in corporate management and Wall Street generally. A meeting this week by the Federal Reserve Board has been virtually ignored, with economists predicting no action on interest rates. Closely dissected will be any comments on the state of the economy emerging from the meeting, to be held over the next two days.