Wall Street report: Monday close

NEWS that a suspected terrorist plotting to explode a radioactive 'dirty bomb' had been arrested caused a momentary blip in US markets. Fears that a long-anticipated tech rebound might have blown up had a longer lasting impact.

The Dow Jones Industrial Average surrendered a 20-point gain immediately headlines concerning the arrest flashed across trading screens. But markets quickly righted themselves and the Dow went on to close up 55.73 points or 0.6% at 9645.40. The Nasdaq succumbed to late selling to close down 4.79 points or 0.3% at 1530.69.

Analysts said investors, hit with a flurry of 'scare' headlines in the past few months, were becoming more inured to potentially disruptive events. Jim Awad, of Award Asset Management, said investors were more focused on accounting and integrity in the wake of Enron's collapse. 'This is the third year of the wringing out of excesses built up in the 90's,' Awad said. 'We could have several more months of this.' Tyco International, the conglomerate which has seen its market value plunge more than 80% since January, recovered $1.31 or 13% to $11.41 despite more media revelations about its bookkeeping.

Investors were choosy, committing only to names above the accounting fray. Wal-Mart, the world's biggest retailer, climbed $1.97 or 3.6% to $55.82 on upbeat sales forecasts coming out its annual meeting in Arkansas on Friday. Do-it-yourself chain Home Depot moved up $1.12 or 2.9% to $39.95.

Late selling in the tech sector hit semiconductor stocks the hardest, based on new concerns about the demand for tech products including personal computers. Intel, the giant chipmaker which knocked market confidence by lowering its sales forecast late last week, surrendered an early gain to close lower by 93 cents or 4.2% to $21.07. IBM was marked down $1.50 or 1.9% to $75.80.

TRW rose 73 cents or 1.4% to $54.70 as BAE Systems confirmed it was in a 'dialogue' with the defence firm which could lead to an offer. Northrop Grumman, which has a $6.7bn (£4.6bn) offer on the table for TRW, jumped $3.01 or 2.6% to $120.70.

Instinet, majority-owned by Reuters, gained five cents or 0.7% to $7.10 after it said it would buy rival Island ECN in a $508m share swap. The transaction will make Instinet the biggest electronic firm trading Nasdaq shares outside the exchange itself. Reuters' US shares eased 74 cents or 1.9% to $38.81.

Mobile equipment makers continued their decline this time on diverging analysts' views. Ericsson's US shares dipped six cents or 3% to $1.98. Nokia lost 30 cents or 2.4% to $12.