IBM alert takes gains off Dow

Stocks fell sharply in New York as a mostly encouraging stream of fourth-quarter profit reports was overshadowed by a weak IBM…

Stocks fell sharply in New York as a mostly encouraging stream of fourth-quarter profit reports was overshadowed by a weak IBM forecast citing the continuing economic crisis in Asia.

The Dow Jones industrial average fell 1 per cent, a partial recovery from a 135-point slide that briefly wiped out all of Tuesday's 119-point rally.

Broad-market indicators also surrendered a chunk of Tuesday's gains.

The heavy losses came despite some better-than-expected fourth-quarter profit reports from Dow components Caterpillar and Exxon, as well as Compaq Computer and Delta Air Lines.

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Surprisingly, although IBM tumbled the equivalent of more than 30 Dow points after its gloomy announcement after the close of trading on Tuesday, the technology sector suffered only a marginal loss.

The technology-heavy Nasdaq composite index fell only a little bit more than a tenth of a percent, down 2.22 to 1587.92.