Wall Street: Wednesday close

DASHED hopes of an imminent revival in the tech sector and new violence in the Middle East sent Wall Street tumbling. The Dow Jones Industrial Average dropped 144.55 points or 1.49% to 9561.57, its lowest levels of the year. The Nasdaq Index plunged 46.13 points or 2.99% to 1496.83, 200 points below where it stood on 10 September, the day before the terrorist attacks on New York and Washington.

The selling was foreshadowed by negative reports from Apple Computer, optical transmission equipment company Ciena and chip maker Advanced Micro Devices after the close of trading on Tuesday.

The essence of what they reported - and a superficially more positive earnings report from software maker Oracle - was that tech spending remains weak and will probably stay in a slump at least until the latter part of this year. Softness in European personal computer demand was among factors cited.

The fall-out included a drop of $3.03 or 15% to $17.12 in Apple, a 44 cents or 10% haircut to $3.96 in Ciena and a decline of $1.60 or 16% to $8.70 for Advanced Micro Devices. Oracle shed 18 cents or 2% to $8.80 as it topped quarterly forecasts, but warned that conditions could remain weak through to the final quarter of 2002.

The knock-on effect hit Intel, off $1.93 or 9% to $20.09, and Dell, down $1.98 or 7.4% to $24.73. Hewlett-Packard slid 92 cents or 5.2% to $16.95.

Official investigations into semiconductor prices hit Micron, marked down $3.52 or 15% to $20.08, and Rambus, which plummeted $2.31 or 36% to $4.12.

While the tech sector was under pressure from the opening bell, pressure on the broader market escalated after a suicide bombing occurred in Israel. Among Dow components, Walt Disney dropped $1.09 or 5% to $20.86, AT&T eased 46 cents or 4.4% to $10 and Citigroup was marked down $1.01 or 2.4% to $42.06.

News that TRW had sold its Solihull-based aeronautical division to rival Goodrich had little effect on the shares involved. TRW was up fractionally at $55.97. Goodrich was off slightly at $28.98. Companies including Northrop Grumman and BAE Systems have indicated they are interested in buying all or part of TRW. The aeronautical division, formerly known as Lucas, is the smallest of TRW's four divisions.

Martha Stewart Omnimedia rebounded $2.05 or 14% to $16.45 after another attempt to calm concerns over the well-publicised woes of its founder, domestic diva Martha Stewart. She has been implicated in the selling of nearly 4,000 shares in troubled ImClone Systems just days before its shares plunged on an adverse ruling on its anti-cancer drug by the Food and Drug Administation. She has denied any wrongdoing.