Stocks fell sharply yesterday, with worries about company profits preventing an enthusiastic response to a reassuring commentary by Federal Reserve chairman Alan Greenspan and a big drop in interest rates.

The Dow Jones industrial average erased an early 47-point loss, but slid over the final two hours to finish 78.22 points lower at 8,971.70. The Dow slipped 19 points on Tuesday after gaining 265 points the prior three sessions.

The Standard and Poor's 500 fell 3.93 to 1,114.48, and the technology-heavy Nasdaq composite index fell 27.50 to 1,773.26.

Declining issues outnumbered advancers by more than a two to one margin on the New York Stock Exchange, with 979 up, 2,048 down and 504 unchanged.

NYSE volume totalled 607.56 million shares as of 4 p.m., up from 560.57 million on Tuesday.

The NYSE composite index fell 3.13 to 574.37, and the American Stock Exchange composite index fell 7.22 to 706.85.