Wall Street: Wednesday close

A HOST of worries, from the Middle East to Wall Street accounting, helped spark a major sell-off. The Dow Jones Industrial Average, down 90 points in the first two days of the week, fell 115.42 points or 1.1% to 10,198.29 in its fourth straight decline. The Nasdaq Index, which tumbled 3.1% on Tuesday on falling hopes of a rapid profit rebound for techs, dipped 20.05 points or 1.1% to 1784.35.

News that the Securities and Exchange Commission was investigating at least two more companies over their accounts revived the worries about corporate book-keeping that were first sparked among investors by the Enron scandal.

Communications company Williams and cable TV provider Adelphia are the latest to fall under the investigators' eyes. Shares in both had already been marked down on analysts' concerns over their accounting. Williams dropped $1.09 or 4.5% to $23.08, from $44 a year ago. Adelphia shed 79 cents or 6.7% to $11.04, from $43 last July.

Williams said it had received a request for information, but it did not believe there were any 'unresolved issues' with the SEC. Adelphia confirmed that the SEC had notified it of an informal inquiry.

The accounting jitters fed concerns that companies were having to stretch to meet investor expectations. More conservative profit tallying has played some role in analysts cutting their profit forecasts, especially in the tech sector, in recent days.

The escalating fighting in the Middle East has not helped investor psychology. Salomon Smith Barney economist Steven Wieting said the recent surge in oil prices has added to fears about the strength of an economic recovery. 'While oil prices rise naturally with demand recovery, US involvement in military activity abroad and issues related to Middle East politics have a psychological impact of their own, which could possibly result in a tightening of financial conditions,' he said.

Philip Roth, technical analyst with New York firm Miller Tabak, said the market was 'muddled' with statistics he watched showing no clear pattern. 'It's a wash right now,' he said, although he added that the tech sector 'appears to be getting oversold short term'.

Pharmaceuticals giant Bristol-Myers Squibb, hammered lately on a series of setbacks, eased 26 cents or 0.7% to $37.70. It dropped another $3.70 or 11% to $34 in extended hours trading after warning on its results.

PeopleSoft, the software maker that lost a third of its value on Tuesday after warning its numbers would disappoint, shed another 40 cents or 1.6% to $24.76.

Humbled telecoms group WorldCom fell 27 cents or 4% to $6.51, well below its 52-week high of $21.52, as it said it would lop another 3,700 jobs or 4.4% of its workforce.

Chemicals giant DuPont offered a rare piece of good news by guiding its profit forecasts higher, but its shares surrendered an early gain to close down 68 cents or 1.4% to $46.67. Heavy equipment maker Caterpillar, which has had a strong run in anticipation of an economic recovery, eased $1.48 or 2.6% to $54.92 on a broker downgrade. Scotch tape maker 3M gave up $2.08 or 1.8% to $112.91 on a sour note from at least one broker.

Investment firm Bear Stearns leapt $2.41 or 3.8% to $65.15 on rumours that it had become a takeover target.