Wall Street: Thursday close

A FINAL hour rebound offered investors hope that the worst might be over even as another major American company admitted that its accounting had come under investigation.

The Dow Jones Industrial Average clawed its way back from a 200-point drop to close down 11.97 points or 0.1% at 8801.05. The Nasdaq bounced off its lowest levels since early 1997 to finish ahead 28.42 points or 2.1% at 1374.43.

Analysts credited 'bottom fishing' by investors who think the market has fallen too far given economists' expectations for a continued US recovery. But some market-watchers were warning that other recent rallies had turned out to be short-lived. 'Clearly, there is a pent-up demand,' said Tony Dwyer, chief market strategist at investment firm Kirlin Securities. 'We may see a little technical bounce in the next day or two, but it won't amount to much. There's still too much negativity out there.'

Bristol-Myers Squibb added to plunging confidence when it disclosed that the Securities and Exchange Commission had launched an informal inquiry into its accounting. Reports said the investigation would focus on $1bn which may have been improperly booked as revenues.

BMY has seen its market value dive 66% since late last year, partly on speculation that its accounting had been on the adventurous side. BMY shares gave up $1.05 or 4.5% to $22.11.

Internet portal Yahoo fell then recovered to close up 73 cents or 6% at $12.92 after it reported its first quarterly profit in several quarters. But the profit was calculated on 'pro forma' numbers, a method of accounting investors have grown to distrust.

Ford fell 81 cents or 6% to $13.18, near a seven-year low, while old rival General Motors recouped an early loss to finish slightly higher at $47.72 after a broker highlighted shortfalls in the companies' contributions to employee pension and healthcare funds.

Qwest, the troubled telecoms company, staged an intra-day recovery to end with a gain of 10 cents or 6% to $1.87 a day after it disclosed it was under a criminal investigation by the US Attorney's office in Denver. Qwest shares are down from a 52-week high above $30.

WorldCom continued its descent in the wake of its disclosure of alleged accounting fraud, falling four cents or 21% to 16 cents after saying it would be unable to pay a scheduled dividend to shareholders of subsidiary MCI at the end of this week. Its chief executive said it would be difficult for the company to avoid filing for bankruptcy.

Biotech giant Genentech offered a ray of good news when it topped quarterly earnings forecasts. Genentech shares jumped $2.64 or 11% to $28.14. Eastman Kodak, a Dow component, did its best to help steady nerves as it raised its earnings estimates. Kodak shares climbed $2.94 or 11% to $29.58.

Wal-Mart, up 42 cents or 0.8% to $54.18, found investor favour after it raised its profit targets due to strong consumer traffic through its stores.

Techs turned higher as the day wore on, with Intel surging $1.44 or 9% to $18.25.