Wall Street: Tuesday close

BIG Blue, Mickey Mouse and Scarlett O'Hara found themselves at the centre of a selling frenzy on Wall Street which dropped markets to their lowest levels since November. The Dow Jones Industrial Average, which has been whip-sawed lately between bookkeeping jitters and hopes for a resurgent US economy, plunged 157.90 points or 1.59% to 9,745.14. The Nasdaq Index, which started the day down 7.4% on the year so far, tumbled another 54.59 points or 3% to 1,750.61.

IBM, known as Big Blue for the color of its packaging, bowed to investor demands and said it would make its accounting more transparent, including how its books asset sales and the contribution of employee pension funds to its bottom line. But the promise to come clean by America's ninth biggest company with a market value of $174bn. appeared to backfire by reviving concerns that many companies may be hiding things in the post-Enron era. IBM shares fell $3.35 or 3.3% to $99.54.

'What it will take to extinguish these accounting fears is for a flagship company like IBM to go through an investigation process and come out clean,' said Louis Navellier, portfolio manager with the Navellier Performance Funds. 'Until the public sees some evidence that these fears are inflated beyond reality, companies will have a tough time benefiting from any possible positive news.'

Walt Disney was knocked for a loss of $1.04 or 4.4% to $22.86 after the US Supreme court agreed to consider whether to overturn a law extending certain copyrights for an additional 20 years. Disney was a major beneficiary of the law which shielded its major characters including Mickey Mouse, Donald Duck, Goofy, Pluto and Snow White. AOL Time Warner dropped 53 cents or 2% to $25.52 as a decision to scrap the law would place in jeopardy its rights to 'Gone with the Wind' and 'The Wizard of Oz.'

But the accounting situation remained at centre stage with companies even tangentially involved coming under selling pressure. PNC Financial said it would have to correct some of its figures and its shares dropped $1.60 or 2.8% to $55.35. Struggling credit card issuer Providian Financial said its chief financial officer was leaving. Providian shares shed 16 cents or 3.8% to $4.08. General Electric, which has been accused of using bookkeeping techniques similar to those employed by IBM, surrendered 71 cents or 1.9% to $36.40.

Financial companies were shelled as investors worried about their exposure to Enron and other cash-challenged companies. JP Morgan, sued by shareholders claiming they should have been told more about the bank's exposure to Enron, shed $1.02 or 3.4% to $29.03. Citigroup, another major lender to Enron, fell $1.91 or 4.3% to $42.22. Goldman Sachs lost $4.31 or 5.2% to $78.45.

Telco's continued their losing streak as investors worried about the industry's borrowings in an environment where lenders are turning cautious. WorldCom gave up 25 cents or 3.7% to $6.48. Sprint eased 40 cents or 3% to $12.90. Wireless company Nextel plunged $1.31 or 27% to $3.55 as it disclosed a big write-off at its international subsidiary.

Techs wilted again as investors appeared to despair of rosy predictions of a snapback in demand. Microsoft slid $1.30 or 2.2% to $58.93. Cisco Systems was lower by 28 cents or 1.6% to $16.81. Sun Microsystems dipped 57 cents or 6.4% to $8.33, helped down by an analyst's downgrade.

Boeing eased $1.19 or 2.7% to $43.71 as an analyst questioned whether its run-up since September was overdone. Fashion house Tommy Hilfiger dropped 54 cents or 4.5% to $11.39 after insider selling was disclosed. UAL, parent company of United Airlines, soared $1.59 or 14% to $12.95 after it reached a tentative agreement with its machinists' union to avert a possible strike.