Wall Street: Thursday close

BILL Gates will see another big chunk of his fortune disappear this morning after

Shares in Microsoft plunged $4.01 or 7% to $51.88 in after-hours trading minutes after the company said its profits for the latest quarter had fallen substantially below Wall Street projections.

The latest drop erases $4.6bn from the paper fortune of the world's richest man and caps a 50% plunge from highs reached in early 2000. Microsoft, which retains a market value of about $280bn, is the second most valuable company in the world behind conglomerate General Electric.

The news on Microsoft came after markets closed virtually unchanged after a topsy-turvy day. The Dow Jones Industrial Average, off 80 points on Wednesday after Boeing's results disappointed, closed down 15.50 points or 0.2% at 10,205.28. The Nasdaq Index slipped 8.24 points or 0.5% to 1802.43, 50 points above where it rested at Monday's opening buzzer.

Markets recovered from steep drops coinciding with headlines flashing news of the aircraft hitting a skyscraper in Milan. Nerves raw with reminders of 11 September were calmed by official word that the incident was not terrorism.

Investor focus quickly returned to earnings, with positive surprises rewarded and disappointments punished. Investors were also paying attention to words accompanying reports to see if they could see glimmers of a turnaround in demand.

McDonald's shares leapt $1.46 or 5.4% to $28.62 after it reported stronger-than-expected results, due in part to easing European fears over foot-and-mouth disease. Apple Computer slumped 70 cents or 2.7% to $25.41 as it delivered an outlook investors found too patchy to be reassuring.

IBM reported a 32% drop in profits, but assuaged some of the fears over its accounting and projected growth. Its shares climbed $4.14 or 4.9% to $88.95.

Online auctioneer eBay fell $1.89 or 3.4% to $53.04 in regular trading and shed another $4.43 or 8% to $50.50 after-hours as it reported slowing sales growth.

Colgate-Palmolive took a pasting, down $3.80 or 6.6% to $53.95, after it said toothpaste sales fell unexpectedly. Chipmaker AMD staggered $2.22 or 15% to $12.60 as it cited a 'tough' environment for cutting its projections.

Mobile phone maker Nokia tumbled $2.53 or 12% to $18.10 as it cut its sales projections for the balance of 2002. Rival Motorola, stronger lately on hopes of a rebound in demand for cellphones, came off 43 cents or 2.6% to $15.90. Telephone service provider SBC was marked down 61 cents or 1.8% to $33.89.

Defence and aerospace shares continued under pressure. Boeing, down nearly 7% on Wednesday, dropped another $1.67 or 3.7% to $43.70. Honeywell eased $2.16 or 5.3% to $38.30 after it reported results in line with expectations, but said it might buy some companies. Rival United Technologies weakened $2.55 or 3.7% to $67.25.

Hewlett-Packard fell 45 cents or 2.4% to $18.20 after it said a shareholder vote had given it narrow victory in its contested merger with Compaq Computer. Compaq added 14 cents or 1.3% to $10.82.

Among Dow components, General Motors gave up some of its recent gains, falling 87 cents or 1.3% to $64.08 and Philip Morris gained 79 cents or 1.5% to $53.86.