Dow Jones sheds 1.54%

THE New York stock market has closed sharply lower for the second session in a row, with the Dow Jones index dropping almost 100 points in the last hour of trading.

The Dow Jones industrial average ended down over 98 points, or 1.54 per cent, at 6,303.71 after giving back an early gain of 35 points. On Wednesday, it had lost 71 points, bringing the cumulative loss over the two sessions to more than 2.5 per cent.

Fears of higher US interest rates shave unsettled the markets and the Dow suffered a sharp sell-off last Friday after US Federal Reserve Board chairman Mr Alan Greenspan warned of "irrational exuberance" in financial markets.

Nervous investors are keeping a wary eye on New York where the Dow Industrial average has risen nearly 30 per cent this year. Many believed a downturn was overdue.

Earlier European stocks had been dragged down in late trading by a volatile Wall Street which quickly shed early gains in a bout of profit-taking. European bourses had an unsettled day, with most seeing their gains eroded at the close after spurting forward when weaker-than-expected US retail sales figures allayed fears of an imminent rise in interest rates.

After rising 27 points at one stage, the FTSE 100 closed just 8.2 points higher at 3,990.7. In Dublin the ISEQ index closed just over 2655 down by almost 10 points. In Frankfurt, the IBIS index that measures computerised trading climbed by 0.7 per cent after the US data eased interest rate fears but slipped back.