Spy plane row adds to Dow gloom

Wall Street has fallen back into a deep slump as a seemingly relentless stream of earnings warnings sent the Dow Jones tumbling nearly 350 points and the Nasdaq down more than 100.

The Dow recovered from its lows of the day, but still closed down 292.22 at 9,485.71; the Standard & Poor's 500 index slid 39.43 to 1,106.44; and the Nasdaq dropped 109.98 at 1,672.99, its lowest point since October, 1998.

The decline shows that Wall Street is still mired in the pessimism over earnings and the economy that dominated the month of March, sending the Dow briefly into bear market territory and solidly planting the S&P 500 there.

The stock market's edginess also reflected nervousness about the US spy plane that remains grounded in China following an emergency landing.

China is demanding that the United States stop surveillance flights after a collision between the plane and a Chinese fighter jet.

Investors on Wall Street had been bracing themselves for this month's first-quarter reports, their anxiety intensified by the latest round of earnings warnings.

Ariba slipped 31% after the business transaction software company reduced its quarterly outlook and said it will cut 700 jobs because of a fall in sales.

BroadVision, another provider of e-commerce to business, fell 34% after lowering its quarterly expectations, citing sluggish demand.

These companies joined a variety of other companies, including high-tech concerns and blue chip stalwarts such as American Express and Procter & Gamble, that have warned of disappointing earnings this year.

Investors also punished US carmakers, which reported that domestic sales in March fell by 9%. That result was better than expected, but not good enough for Wall Street, with General Motors among the fallers.