Wall Street report: Tuesday close

A NEW knock to confidence in the way American companies are run helped end Wall Street's winning streak. The Dow Jones Industrial, up 260 points in the past two sessions, gave back 21.04 points or 0.2% to 9863.74. The Nasdaq Index, which gained 55 points in the two-day rally, dipped 12.45 points or 0.7% to 1834.21.

Analysts said accounting worries had been revived by new disclosures from the telecoms and tech sectors. Other factors eroding sentiment included former Enron chairman Kenneth Lay declining to answer questions before a Congressional committee, and a new warning of possible terrorist attacks issued by the FBI.

Telecoms equipment provider Nortel Networks provided the latest headline for declining confidence in the integrity of US executives in announcing the departure of its chief financial officer for allegedly trading shares in his personal retirement account prior to the release of company statements.

Nortel, which had rallied in recent days on hopes of a rebound in demand for communications equipment, also said the outlook remained 'challenging'. The shares plunged 42 cents or 6.9% to $6.37.

Nortel rivals retreated on the news. JDS Uniphase dropped 37 cents or 5.4% to $6.55, Lucent lost 26 cents or 4.2% to $5.99 and Ciena 39 cents or 3.7% to $10.08.

Data storage company EMC added to accounting jitters on a newspaper report that a former executive had accused EMC of improper book-keeping and that he had been interviewed by the Securities and Exchange Commission. EMC shares slid $1.04 or 6.9% to $14.

Broker ABN Amro felt it necessary to come out with comments describing Microsoft's accounting as impeccable. Still, Microsoft shares fell 99 cents or 1.6% to $60.14. Conglomerate Tyco International, whose shares had been clawing their way back after management's effort to soothe fears over its book-keeping, fell $1.30 or 4% to $30.50.

Financial services shares were lower on concerns about loans to Argentina and troubled companies. JP Morgan fell 35 cents or 1.1% to $31.49. Citigroup traded down 68 cents or 1.5% to $45.15. Goldman Sachs came off $1.35 or 1.6% to $83.50.

Media giant News Corp. eased 53 cents or 1.9% to $27.35 on news that its losses rose to $606m (£398m) in the latest quarter, hit by write-offs for programming in baseball, football and car racing.