Stocks fell sharply in New York yesterday as investors remained nervous about interest rates and company profits for the nearly-finished quarter.

An afternoon rebound in the Dow Jones Industrial Average fizzled out, and the blue chips finished 94.35 points, or 0.9 per cent, lower at 10,721.63.

Broader stock indicators also posted steep losses. The Standard and Poor's 500 fell 13.12 to 1,335.88, and the technology-heavy Nasdaq composite index fell 50.02 to 2,580.26.

Declining issues outnumbered advancers by a 9-to-7 ratio on the New York Stock Exchange, with 1,299 up, 1,690 down and 564 unchanged. The Russell 2000 index of smaller companies fell 2.11 to 447.33.

With no new economic data to steer the market, investors remained focused on next week's meeting on inflation and interest rates at the Federal Reserve. While it is accepted that the Fed will probably nudge lending rates higher to slow the economy, this week's increase in bondmarket interest rates has proved unsettling.