Wall Street: Wednesday close

WORRIES that America's giant economy might be in for a 'double dip' helped drop markets to near six-month lows. The Dow Jones Industrial Average fell 58.81 points or 0.58% to 10,030.43. The Nasdaq Index lost 16.95 points or 0.98% to 1,713.34 in its sixth straight losing session.

New data on durable goods orders and new home sales stoked concerns that the US economy may be either levelling out after emerging from last year's shallow recession or falling back into a 'double dip.'

US Federal Reserve Board chairman Alan Greenspan had outlined his caution over the strength of the recovery in recent days and at least one prominent forecaster, Stephen Roach, chief economist of Morgan Stanley, had been warning that the US economy could stumble back into recession.

Orders for durable goods fell 0.6% in March, dashing hopes of a revival led by private sector capital expenditure.

'This provides further evidence that capital equipment spending remains depressed,' said John Youngdahl, economist with Goldman Sachs. 'This report likely will solidify the Fed's view that the spending outlook is uncertain.'

Market analysts had been banking on a recovery in capital expenditure to fuel demand across the economy and bolster company earnings.

New homes sales dipped 3.1% to 878,000 units on an annual basis, below the 890,000 forecast by economists, in another reminder that consumers might be turning more cautious in the face of continued job cuts, especially in the tech and telecoms sectors. The Federal Reserve's so-called 'Beige Book,' a region by region summary of US economic conditions, also offered little encouragement for a robust, profit-boosting recovery.

The uncertain recovery has been reflected in quarterly company reports, which have helped drive major markets to near two-month lows. The procession of companies reporting downbeat results included telephone giant AT&T, which chalked up an $875m (£628m) loss in the past three months. AT&T shares, battered in recent weeks on expectations of a bleak report, fell another 10 cents or 0.7% to $13.75.

AOL Time Warner, reported a $54.2bn. write-down related to AOL's purchase of Time Warner, but trading results were better than expected. AOL shares, up 19% or 1% to $19.30 in regular trading, but leapt 6% in extended hours after the report was released. AOL shares traded at $60 last year.

Conglomerate Tyco Internationalsagged 78 cents or 2.9% to $25.91, off from $60 in January on reports that it might have to shelve the sale of its plastics division because bids had come in far below its asking price.

Spam maker Hormel said a Russian ban on poultry had helped cut US prices for poultry and pork and hurt its bottom line. Hormel shares fell $1.97 or 7.3% to $25.

Online retailer Amazon.com jumped $2.73 or 19.4% to $16.79 after it reported rising sales and a narrower-than-expected quarterly loss.

Two big techs involved in court proceedings saw their shares trimmed. Microsoft lost 97 cents or 1.8% to $53.02 as its fight to limit penalties in a Washington DC case continued. Hewlett-Packard slid 83 cents or 4.6% to $17.21 on what analysts called damaging evidence in a case brought by shareholders fighting its proposed takeover of Compaq Computer.

Some telecoms steadied after the battering of the past few days. WorldCom was up seven cents or 2% to $3.48, local telephone company SBC rose 30 cents or 1% to $31.58 and Verizon Communications tacked on 76 cents or 1.9% to $40.90.

Among Dow components, ExxonMobil traded down $1.05 or 2.5% to $40.30 on lower oil prices, aluminium maker Alcoa eased 69 cents or 1.9% to $34.99, Intel was marked down 63 cents or 2.1% to $28.91 and General Electric was down fractionally at $32.50.