US stocks fall sharply

US investors have been selling stocks sharply lower while awaiting fourth-quarter results that begin in earnest this week.

The Dow Jones closed down 96.11, or nearly 1%, at 9,891.42, while the Nasdaq composite index fell 31.72, or 1.6%, to 1,990.74.

The Standard & Poor's 500 index declined 7.19, or 0.6%, to 1,138.41, and the Russell 2000 index fell 6.93, or 1.4%, to 483.01.

Analysts say the weakness was also prompted by comments on Friday from Federal Reserve Chairman Alan Greenspan, that the economy is stabilising but still faces significant risks.

The market's losses were widespread. IBM fell $2.26 to $118.05, and Juniper Networks declined $1.16 to $18.10. JP Morgan Chase fell $1.03 to $37.31, and Yahoo decreased $1.15 to $19.01. All are to release earnings later in the week.

Retailers were lower ahead of the Commerce Department's report on December sales. Target stumbled 84 cents to $39.46.

Kmart fell 14%, down 46 cents at $2.84, after its credit rating was downgraded further into junk status late on Friday by Moody's Investors Service. Kmart's stock plummeted more than 35% last week after it reported weak holiday sales and talked of cash flow problems that could require more financing.

Wall Street boasted a few winners, however. Fannie Mae rose 95 cents to $79 after posting fourth-quarter earnings of $1.40 a share, a penny higher than expectations.

Micron Technology gained 47 cents to $35.60 after Lehman Brothers raised its rating on the stock to "buy" from "market perform".

Declining issues outnumbered advancers 3 to 2 on the New York Stock Exchange where volume was moderate.