NEW YORK REPORT: Stocks were trounced yesterday, shoving the Dow average to its lowest level since 1998 as corporate bad news worsened, ranging from Sun Microsystems's dim forecast to a federal probe of Johnson & Johnson.

Dow Jones Industrial Average: 8,019.26 (-390.23)

The Dow Jones Industrial Average was ripped for a 390.23-point loss, or 4.64 per cent, to 8,019.26, the seventh-largest point decline in the average's history and the lowest close since October 1998.

The Nasdaq Composite fell 37.90 points, or 2.79 per cent, to 1,319.05 and the Standard & Poor's 500 dropped 33.30 points, or 3.78 per cent, to 848.26.

"The outlook is still not good," said Mr Will Muggia, manager of the Touchstone Emerging Growth Fund. "Earnings may have bottomed, but there's no palpable sign of an uptick yet.

"Investors are waiting for capital spending and information technology spending to increase and they haven't seen it."

For the week, the Dow dropped 7.7 points, the S&P 500 lost 8 per cent and the Nasdaq gave up 4 per cent.