US stocks took a pounding yesterday as the Federal Reserve's decision to keep interest rates unchanged highlighted US central bankers' worries about the global fallout from the economic crisis in Asia. A big drop in technology stocks also soured investors' taste for stocks.

The Dow Jones industrial average tumbled 157.41 points, or 2.08 per cent, to 7,401.32. In the broader market, declining issues swamped those advancing 23-6 on active volume of 588 million shares on the New York Stock Exchange. The Nasdaq composite index plunged 43.15 points, or 2.7 per cent, at 1,541.71.

The Fed voted to hold the line on interest rates, a move which was widely expected but seen as confirming that the nation's central bank is uneasy about the ripple effect of the Asian problems.

Investors rushed to safety, buying bonds. The benchmark 30year Treasury bond jumped half a point, or $5 on a $1,000 bond, which lowered its yield to 6.11 per cent.