THE plunge in US share prices has prompting predictions that the long bull market may have come to an end.

The catalyst was a profit warning from Hewlett Packard, the computer group, released after the market closed on Wednesday.

The Dow Jones Industrial Average fell by almost 100 points in early trading and an attempt to rally late in the morning failed. By early afternoon, the Dow was 114.14 lower at 5,489.51. It closed down 83.11 at 5,520.54. The market has not recovered from its near 115 point decline last Friday and as a result was nearly 300 points below its record closing high of 5,778.00 achieved in late May.

Mr Michael Metz, market strategist at Oppenheimer, said. "The whole bull market is over. We have seen the highs for the next year or so. He predicted the Dow could fall to 5,000 by the end of the third quarter.

Hewlett Packard shares closed down sharply and it was closing its disc drive manufacturing activity, which would result in a third quarter charge against earnings of

That news followed a warning late on Tuesday from Motorola, the semiconductor and telecommunications equipment group, of slowing growth and increasing price competition. That had pushed the Dow down by nearly 50 points on Wednesday morning, although the market recovered late in the day on computer driven trading.

Technology shares were the hardest hit yesterday, with the Nasdaq index, which contains many high tech stocks, falling 42.39, or 3.7 per cent, to 1098.80 in the early afternoon. However, analysts said the poor technology news was only a catalyst for the market's fall.

Mr Stephen Roach, chief economist at Morgan Stanley, said. "The techs started it, but the market has been waiting for an accident. This may be it."

Mr Philip Jordan, of Daiwa, said there was substantial activity in the market as large investments managers decided to reduce the proportion of their portfolios devoted to shares. They were switching into the relative safety of fixed income securities, driving the bond market higher.

European investors have been concerned for some time that shares on Wall Street look expensive on measures such as dividend yields and asset values.

The continued strength of the US market has provoked growing unease in the British Treasury recently. Some officials believe that it presents a hazard in a year that has an otherwise healthy economic outlook.

In particular, officials point out that the pattern of stock market movements over the past year is potentially even more ominous that in the run up to the 1987 stock market crash.

European stock markets, which have much smaller high tech sectors than the US, fell only modestly yesterday, with investors conscious that Wall Street has rebounded quickly after previous falls.

In London, the FTSE 100 index lost early gains to fall 16.8 points to 3,749.0, while French and German markets each dropped by around 0.4 per cent. The Dublin market also lost ground in late trading.

However, a more sustained decline on Wall Street would hit world markets. Analysts are spotting signs that such a retreat is possible.