Cisco, Oracle, Gateway, IBM, Hewlett Packard and Compaq were among a slew of companies which saw a sharp drop in their share price. Analysts started selling shares after new figures showed that US consumer confidence had fallen for the fifth consecutive month to its lowest level since June 1996. Consumer confidence weak The Conference Board, which measures the US public's optimism about the economy, reported that its consumer confidence index fell by nine points to 106.8 from a revised 115.7 in January. Economists polled by the news agency Reuters had forecast the index would fall to 109.6. The report sparked fears that consumer spending, one of the main engines of economic growth, was flagging.
Consumer spending makes up about two-thirds of economic output.
Meanwhile, a separate report on US housing on Tuesday also suggested that the economy could be in trouble. This is the lowest level in 11 years, even though mortgage rates are falling. Hopes of a further cut in interest rates by the Fed this week were dampened on Tuesday by comments from one of the US central bank's officials. Fed vice chairman Roger Ferguson said there were mixed signals on the economy, but commented that consumer spending was holding up well, despite the drop in consumer confidence. Hospital workers join South Korea strike Links to more Business stories are at the foot of the page.