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Dow Jones plunges 86 points

The Dow Jones index dived almost 86 points yesterday after a string of poor profits news and fears that attempts to balance the government budget by cutting spending will slow the economy. It was the market's fourth decline in five days, made worse by two rounds of computer-driven orders to sell stocks.

Confidence in the market sank when Xerox Corp, waste management company Browning-Ferris Industries and Pyxis Corp, a maker of drug dispensing machines, reported unexpectedly weak earnings. "People are nervous," said Lance Zipper, head of Nasdaq trading at Brean Murray Foster Securities. "They had a great nine months and they're looking to hold on to the year's gains."

Eleanor Hoagland, chief portfolio strategist at AMT Captial Advisers, said she thought the market could lose 10 per cent if investors started to focus on plans to cut the deficit which might have an adverse knock- on effect on the earnings growth. Bloomberg