The Dow Jones briefly fell below 10,000 yesterday as news of an inflationary spurt and a warning about market exuberance from Federal Reserve chairman Alan Greenspan sent stocks tumbling in New York.

The drop below 10,000 lasted only moments, and the index fell no further than 9,998.18. But the average still finished 266.90 points lower at 10,019.71 for its worst close since early April.

The loss yanked the Dow's gain for the year below 10 per cent and put the average about 1,300 points below the August 25th record close of 11,326.04, when the Dow was up more than 23 per cent.

Broader stock indicators also suffered heavy damage. The Nasdaq composite index and the Standard & Poor's 500 both fell more than 2.5 per cent on the day.

Declining issues outnumbered advancers by more than a 3-to-1 margin on the New York Stock Exchange, with 687 up, 2,400 down and 436 unchanged. Nasdaq decliners led by a slightly smaller margin.

The sell-off followed a morning report that showed prices at the wholesale level hit 1.1 per cent in September, the largest increase in nine years.