Stocks slumped yesterday as more bad news about anthrax among US postal workers spooked the market, squashing an early rally built on positive quarterly earnings reports.

Stocks slumped on news that a New Jersey postal worker is suspected of having the inhaled form of the disease. Also, the Washington DC mayor confirmed the bacteria killed two Washington postal workers.

Quarterly results poured in from Corporate America in one of the busiest weeks of the earnings reporting season.

Companies like Exxon Mobil, the number one US oil company, and telecommunications gear maker Lucent Technologies were in the spotlight.

Lucent posted a bigger-than-expected loss and took an $8 billion restructuring charge amid the slowdown in the telecom industry. Lucent fell 25 cents to $6.65.

Exxon Mobil, the world's largest publicly-traded oil company, said its earnings fell nearly 23 per cent as crude oil prices dropped. Exxon fell 25 cents to $40.87.