Wellington, May 8 NZPA - Telecom shares were down 7c in early trading to 275 after the company reported its third quarter results.

The figures showed a 14 percent rise in the company's third quarter net profit to $159m, while revenue lifted 1 percent to $1.4 billion.

Retailer The Warehouse slipped 3c early to 372 after reporting third quarter sales down 2.8 percent on the corresponding period last year to $383.5 million.

Their declines came in a tumbling market, with the benchmark NZSX-50 index down 29.97 points, or 1.1 percent, to 2824.9 around 10.25am, having risen 23.5 points yesterday.

Today's sharp early fall comes after United States stocks slid as investors took profits from the technology sector's recent surge, while analyst downgrades hurt telecoms and a tepid response to a US government bond auction raised fears about public finances.

Investors worried that poor demand for government debt could raise the cost of capital and hamper chances of a US economic recovery.

"The auction is big news because now it's showing that maybe the Chinese don't want our bonds. If the cost of capital for the United States becomes more expensive, then the recession is going to take that much longer to get out of," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

Shares falling early in this country included Fletcher Building down 12c to 672, Fisher & Paykel Healthcare down 7c to 310, Sky City down 6c to 287, and Hellaby Holdings down 3c to 62.

Early risers included Pike River Coal up 3c to 94, Rakon up 3c to 155, and Tower up 3c to 157. NZX gained 12c to 785 on low volume.

In the US, the Dow Jones industrial average dropped 1.2 percent to 8409.85, the Standard & Poor's 500 Index slid 1.3 percent to 907.39, and the Nasdaq Composite Index fell 2.4 percent to 1716.24.

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