Wall Street is worried that a war would undermine an already fragile economy. Investors' concerns about the economy increased today after Federal Reserve chairman Alan Green-span questioned the Bush administration's proposed tax cuts.

The market was building on yesterday's losses, which followed the release of an audio tape presumably of Osama bin Laden vowing solidarity with Iraq. Analysts don't expect the market to make much upward progress until it is clearer whether there will be a war and how successful the United States will be.

"No one is willing to commit themselves. ... It is a market that is drifting, and drifting one way only, and that is down," said Peter Cardillo, president and chief strategist of Global Partner Securities Inc.

The Dow Jones industrial average closed down 84.94, or 1.1 percent, at 7,758.17, according to preliminary calculations. On Tuesday, the Dow shed 77.00.

The broader market was also lower. The Nasdaq composite index fell 16.52, or 1.3 percent, to 1,278.94. The Standard & Poor's 500 index declined 10.52, or 1.3 percent, to 818.68.

The market's losses were partly due to Greenspan's testimony before the House Financial Services Committee. The Fed chairman questioned President Bush's new $1.3 trillion package of tax cuts, saying they would worsen an already bad outlook for the federal deficit.

Greenspan told a Senate committee today that uncertainties about a war with Iraq pose the biggest risk to the economy.

"It is now a market of Iraq, bin Laden and terrorism," Cardillo said.

The effect of war worries is apparent, analysts said, in how investors disregarded fourth-quarter earnings that were, on the whole, better than had been expected.

Investors have been ignoring improving market fundamentals, lamented Ned Riley, chief investment strategist at State Street Global Advisors.

"Main Street investors remain extremely risk adverse, and that manifest itself in a lack of money going into the equity market," Riley said.

Among today's losers on Wall Street, General Motors fell $1.56 to $33.99 after Banc of America Securities lowered its recommendation on the automaker to "sell" from "neutral."

El Paso dropped $1.07 to $3.65 after Moody's Investors Service downgraded its debt rating on the energy company by five notches. El Paso also said chairman and chief executive William Wise is stepping down.

And, Chiquita Brands slid $4.29 to $10.01 the day after the company said cost-cutting measures had a minimal effect in 2002, because the costs were not taken out until late in the year. Chiquita also said it might undertake additional restructuring activities related to a recently completed acquisition.

Gainers included Coca-Cola, which rose 74 cents to $39.74 after releasing fourth-quarter earnings that met Wall Street's expectations.

Declining issues outnumbered advancers slightly more than 5 to 2 on the New York Stock Exchange, where trading volume was light.

The Russell 2000 index, the barometer of smaller company stocks, fell 4.57, or 1.3 percent, to 355.39.