Wall Street report: Tuesday close

WARNING flags on profits from the likes of

The Dow Jones Industrial Average, which closed on Monday at its best level since June, clawed back from a 100-point drop to close up 21.11 points or 0.20% to 10,632.35. The Nasdaq Index slid 32.37 points or 1.68% to 1,897.12 on reminders that demand for some tech products remained depressed.

The sell-off in tech came just a day after several analysts and leading investors warned that the steep climb in shares since 11 September had fully factored in a rebound in profits many sectors had yet to glimpse. Among those sectors is the communications sector, which has continued to push back its target date for recovery.

Wireless telephone giant Nokia became the latest to warn that things were not as hoped and its shares were dropped $1.41 or 6% to $22.09. Telecom equipment maker Lucent, already a shadow of its former self, plunged 66 cents or 10.5% to $5.60 after it postponed its return to profitability.

The twin announcements hit a sector already reeling from accounting investigations dating back to the freewheeling 90's when telecom shares were darlings on Wall Street. WorldCom, the acquisitive 'phone company which beat out British Telecom to buy long distance provider MCI, eased $1.08 or 12% to $7.93 after it said that the Securities and Exchange Commission was asking it for documentation. Telco Qwest slumped another 51 cents or 5.4% to $8.95 as it became the target of an official investigation.

Other telcos and telecom suppliers were hit. Nortel Networks gave up 36 cents or 6% to $5.65. Corning lost 80 cents or 9% to $8.10. Motorola was marked down 28 cents or 1.9% to $14.45.

Microsoft shed $1.80 or 2.8% to $62.54 after Goldman Sachs analyst Rich Sherlund, a long-time admirer of Microsoft and its chairman Bill Gates, said he would not be surprised if the world's biggest software maker reduced its profit and sales guidance in the face of tepid demand for personal computers. IBM gained $3.17 or 3% to $108.41as analysts said the company's latest attempts at full disclosure appeared to have cleared up some of the questions about its accounting.

News Corp. shares fell $1 or 3.3% to $28.95 after Vivendi subsidiary Canal Plus filed a US lawsuit alleging that a 'cloak and dagger' scheme to reproduce TV smart cards had cost it $1bn. Vivendi claimed that the scheme was perpetrated by NDS, a UK-based TV technology company 80% owned by News Corp. US shares in NDS crashed $6.05 or 26% to $16.95. Lachlan Murdoch, heir apparent to father Rupert as News Corp. chief, sits on the board of directors of NDS, which dismissed the claims as 'baseless.'

General Electric, which has the biggest market value of any company in the world, was flat at $41.10 as power company Calpine cancelled or delayed orders for power plant equipment totalling $3bn.