Dow Jones closes below 8,000

America's Dow Jones index has closed below 8,000 for the first time since October 1998 as investors' worries about profits and probity at USA Inc continue to grow.

The last time the Dow was this low was in October 1998. In other words, all of the gains made in the dot.com explosion of the late 1990s have now been wiped out.

As for the technology-heavy Nasdaq Composite - whose dot.com gains have long since evaporated - it finished the day at 1,282.65, down 2.77% and sitting at its worst close since May 1997.

The US losses reflect the picture seen around the world, after markets in London, Frankfurt and Paris lost about 5% apiece amid fears that insurers are selling shares hard to make sure their assets are worth enough to cover claims.

The nervous opening followed a dismal week which had seen hundreds of points wiped off most major indices, with Friday alone producing a near 400-point fall on the Dow.