Wall Street report: Monday close

A NEW crisis of confidence shook markets as shares in IBM were hammered to a four-year low. The Dow Jones Industrial Average, which rose 1% last week, tumbled 198.59 points or 1.98% to 9,808.04, its lowest since early February. The Nasdaq Index, starting the day down 17% on the year, slipped 34.55 points or 2.14% to 1,578.48, where it stood in October.

Analysts were hard pressed to provide reasons for selling which accelerated as the day wore on, but IBM, which has had its accounting questioned, was clearly a cause for concern. Shares in IBM plunged $5.78 or 7% to $76, a level not seen since 1998.

Worries over whether profits will rebound this year also appeared to be partly to blame, especially in the tech sector. Intel sagged 78 cents or 2.9% to $25.78. Microsoft shed 94 cents or 1.9% to $48.62. Cisco Systems, which will report its quarterly earnings this week, was off 25 cents or 1.9% to $12.89.

Early in the day investors had been unwilling to make major bets ahead of a Federal Reserve Board meeting today (Tuesday). Board chairman Alan Greenspan and his colleagues are expected to hold interest rates at 1.75%, their lowest in 40 years, on the rationale that the US economic recovery is tepid and the risk remains that it could slip back into recession. A survey of US economists showed that most think that the Fed will wait at least until its May meeting before raising interest rates.

The ebbing of one inflationary force played into market action. Oil prices slipped 3% immediately after Iraq said it would end a month-long ban on oil exports, a step taken in protest at Israeli action against the Palestinians. ExxonMobil dropped $1.34 or 3.3% to $39.25. BP's US shares lost $1.03 or 2% to $50.82.

Telecom shares, hammered in recent sessions, held their ground for the most part. WorldCom recovered five cents or 2.8% to $1.84. Vodafone's American shares were steady at $13.91. AOL Time Warner slumped to a new low, falling 80 cents or 4.4% to $17.25. News Corp. fell 79 cents or 3% to $25.09 on reports it might have to write off several billion dollars to cover its losses in part-owned Gemstar-TV Guide. Gemstar shares were off 12 cents or 1.4% to $8.60, down from $49.95 in the past year.

Microsoft arch rival Oracle dipped 21 cents or 2.5% to $8.22 after analysts said the company's software appeared to be losing ground to IBM and Microsoft products.

Among Dow components, Boeing dipped$1.25 or 2.8% to $43.38, Walt Disney retreated 71 cents or 3% to $22.89 and Philip Morris was off 33 cents or 0.6% to $56.01.