Blue-chip stocks tumbled in New York yesterday in volatile trading as the stock market's renewed profit jitters were compounded by worries about Monica Lewinsky's deal to testify about her relationship with President Bill Clinton.

The Dow Jones industrial average sank 93.46 points - or 1 per cent - to close at 8,934.78, but recovered from a 211-point plunge that put the measure nearly 500 points below its record of 9,337.97, set less than two weeks ago on July 17th.

Broader stock indicators also slid sharply after midday in a barrage of selling as news broke that Ms Lewinsky had been given immunity in Kenneth Starr's investigation of her relationship with the president.

With the impact of turmoil in Asia hanging over the market for nearly a year, investors have repeatedly bristled at the threat of instability in Washington since January.