Wall Street: Tuesday close

FRAGILE investor confidence cracked again in late trading, sending markets tumbling to near September lows. The Dow Jones Industrial index, which had been up 130 points early, closed with a loss of 155 points or 1.7% at 9126.82. The Nasdaq dropped 36.35 points or 2.5% to 1423.99, back to where it stood just after 11 September.

The latest selling did not appear tied to a specific cause, but seemed to grow out of worries prevailing in the past few months, analysts said. Profit concerns, terrorism jitters and the crisis of confidence in management some publications have referred to as 'Wall Street's Watergate' have been blamed for a near-10% slide in the Dow so far this year. The Nasadaq has lost more than a quarter of its value since 1 January.

A report on consumer confidence which initially cheered investors may also have appeared less optimistic as the day wore on. The Conference Board, the independent research group, said its consumer confidence index fell to 106.4 from the lofty level of 110.3 in May in its biggest drop since the days following 11 September.

But the decline was less than expected, with economists forecasting a major hit in the light of Wall Street's decline, the crisis of confidence in US company management and continuing terror warnings.

Sales of existing homes also came in above expectations, indicating that Americans are still willing to spend on big ticket items even in a climate of uncertainty. The numbers were not expected to cause the Federal Reserve Board to change its stance on official interest rates, already at a 40-year low of 1.75%, at its two-day meeting. A statement on the economy is expected at today's conclusion of the meeting.

The consumer sentiment numbers helped lift retail shares, but their gains were eroded by the close. Wal-Mart added 77 cents or 1.4% to $55.75.

Influential analyst Barton Bigg, Morgan Stanley's chief global strategist, added to the more upbeat sentiment at the opening when he disclosed that he had been buying shares for the past three weeks.

Biggs, who helps manage roughly $400bn in investor funds, told clients that he had been dabbling in telecommunications, media and technology stocks, three sectors hammered in the recent sell-off. 'I still think we could have a good rally from these levels that will last a few months,' he said. Biggs said factors in favour of a rebound were low 'valuations, sentiment and the fact that earnings are going to be improving'.

DuPont, among the world's biggest chemical companies, helped lift the old economy sector when it reported before the opening bell that it would top earnings forecasts. But the shares surrendered most of their gains by day's end, closing only slightly higher at $43.24. Aluminium maker Alcoa was boosted 34 cents or 1.1% to $31.14 and Boeing rose fractionally to $42.87.

Techs weakened late with Microsoft falling $1.21 or 2.2% to $52.95 and Intel sliding $1.01 or 5.2% to $18.32.

Federal Express, the world's biggest overnight delivery service, plunged $8.02 or 14% to $48 after it warned its earnings would be hurt as customers shifted to cheaper truck-borne shipments.

TRW, which has attracted interest in its assets from the likes of BAE Systems and General Dynamics, eased 60 cents or 1% to $55.85, despite reports that Northrop Grumman had raised its takeover bid for the defence systems maker.

Amazon.com slumped $2.17 or 12% to $15.34 on signs rival Buy.com was willing to slash book prices to undercut its larger competitor.