Plummeting oil prices and internet stocks sent Wall Street shares spiralling down 2.32% to close at 9,116,55 after a fall of 216 points.

Last Tuesday, the Dow reached a record high.

The Nasdaq technology-laden composite was down 66.85, or 3.32%, at 1,949.59.

Shares of most US oil companies fell sharply as the price of crude oil sank to a 12-year low.

Expectations that a merger deal between Exxon and Mobil was imminent could not stem the fall among oil shares as January crude oil futures fell below the key $11.00 a barrel in early afternoon.

Deutsche Bank on Monday said it was "sharply lowering its 1999 forecast" to $14.50 per barrel from $16.00.

Oil has been in a free-fall following OPEC's failure at its annual meeting in Vienna last week to help ease global oil surplus.

Meanwhile, Royal Dutch/Shell and Texaco said they had agreed to end talks on forming an alliance of their downstream European oil products marketing and manufacturing activities. Texaco shares fell 3.25%.

Analysts said profit-taking dominated market activity after major indices reached record highs last week.

Defying the negative trend, Bankers Trust was up 1.3 at 87 after Deutsche Bank formalised the proposed merger agreement that will create the world's largest financial institution with assets of more than $800bn.

Deutsche Bank offered Bankers Trust shareholders $93 a share to seal one of the largest takeovers of a US financial institution by a foreign bank.

Elsewhere in the banking sector, profit-taking dominated, with Citigroup down 2.5 at 50.25, Chase Manhattan down 2 at 63.3, and BankAmerica down 15 at 63.

Exxon was up 9.16 at 74.15 and Mobil up 11.16 at 86.3, bucking the trend in the oil sector.

Exxon and Mobil are expected to announce a merger deal tomorrow, which analysts said are likely to result in cost savings of anywhere between $2.5bn and $5bn.

Computer and Internet stocks sold off on profit-taking.

Intel lost early gains to close down 2.3 at 107.5 despite news that Lehman Bros upgraded the stock.

Microsoft was down 6.3 at 121.7 and Dell down 3.1 at 60.3.

Gateway 2000 was down 5.5 at 56 and IBM was down 5 at 165, Compaq was down 1.9 at 32.5 and Apple was down 3 at 332.