Maintenance workers accidentally severed a high-capacity AT&T telephone cable under a Newark avenue yesterday, creating hours of havoc in long-distance calling to and from New York, forcing two major financial markets to close and grounding planes at New York airports.

Hundreds of flights to and from Newark, Kennedy and LaGuardia airports were delayed, and some incoming planes were diverted elsewhere because air traffic controllers were unable to communicate.

The loss of the cable, which could transmit more than 100,000 calls at once, underlined how society's rising reliance on new technology carries a risk because it concentrates so much information in one potentially vulnerable place. A few years ago, that volume of calls would have been spread over numerous, less efficient cables.

"These failures don't occur very often, but when they do occur, there's the potential to have an impact across a broad part of the population," said Casimir Skrzypczak, vice president of science and technology at the New York regional phone company Nynex Corp.

Local service and long-distance service provided by other companies, such as MCI Communications Corp. and US Sprint Communications Co., were not affected. Disruption was widespread, however, because American Telephone & Telegraph Co. is the United States's largest long-distance carrier, handling about 70 percent of all toll calls. The company said that service had been restored almost to normal by 5:30 p.m. yesterday.

The incident was a severe embarrassment for AT&T, which cultivates an image of reliability but which a year ago suffered a virtual shutdown of its network due to errant computer software. It depicted yesterday's failure as a freak accident. "Despite the commitment that {AT&T} people make day in and day out," said AT&T spokesman Herb Linnen, "the dice roll against us."

AT&T said the cut was caused at about 9:30 a.m. by one of its own crews, which was trying to remove an unused cable. For the rest of the morning and into the afternoon, people dialing in or out of the area failed to get through about 60 percent of the time, AT&T said.

The disruption focused on lower Manhattan, where the U.S. financial industry is headquartered. "The phones went down and you could not make telephone calls out of New York City to just about anywhere," said Richard Berner, director of bond market research at the securities firm Salomon Brothers Inc.

The New York Commodities Exchange was forced to close for part of the day, as was the New York Mercantile Exchange, where commodities such as oil are traded. The New York Stock Exchange experienced no difficulty in its own long-distance lines, a spokesman said.

Air travel was involved because the cable had carried communications between air traffic control sites. When it was cut, radar screens no longer displayed computerized data about individual aircraft and controllers could not phone each other. "Traffic did not come to a complete halt in the New York area, but close to it," said Diane Spitaliere, a spokesman for the Federal Aviation Administration. Delays ended at about 1:45 p.m.

Not everyone was upset. "We've got almost no phone calls all day," said one secretary at a Manhattan company, who asked not to be identified, "which was wonderful."

In the 1980s, long-distance companies laid thousands of miles of high-capacity optical fiber cables, which carry phone calls or data in enormous volume as rapid pulses of light. But some research has raised concerns that concentration of calling through single wires brings a higher threat of disruption.

Jeff Held, a telecommunications specialist at the Ernst & Young accounting and consulting firm, said many long-distance companies, because of cost, have not yet put in enough alternate cable routes to handle potential problems. But he said that in view of the Newark line's importance, "It's really pretty amazing to me that that route would not be totally backed up" already.

Jim Carroll, AT&T's vice president for network operations, said the disruption dragged on in part because workers had to reprogram computers and physically rearrange cables -- tasks that soon will be done using new software. "If this had happened this time next year," said Carroll, "the length of this outage would have been in the range of 15 minutes."