Xerox, which ousted its chief executive last month after a bungled re-organisation, yesterday warned of lower-than-expected second-quarter earnings due to continuing sales-force realignment problems and new difficulties in Mexico.

The Dow Jones Industrial Average plunged 2.5 per cent to close at 10,449.30. It was the US index's worst performance since its 617-point drop on April 14th. Xerox, which is building a major operation in Dundalk, Co Louth, and already has an operation in Dublin, said its second-quarter earnings, before special charges, would fall short of Wall Street forecasts. "We're clearly disappointed about our news for the second quarter," Xerox chief executive Mr Paul Allaire said.