WASHINGTON - The resilient "Code Red II" computer worm has spread to affect thousands of computers across the world. A handful of high-profile companies have been among those impacted, including Qwest Communications, Microsoft, AT&T, FedEx and the Associated Press. Qwest has reported spotty outages for users of its high-speed Internet service nationwide. Home cable-modem systems in Virginia and New York also have had slow or no service this week because of the worm.

Qwest spokesman Chris Hardman said his company's users who were running Cisco Systems' high-speed modems were affected. Some popular Cisco hardware is vulnerable to the Code Red worms, according to a Cisco advisory posted on that company's Web site.

Microsoft -- which makes the software that's vulnerable to the Code Red worms' attacks -- has itself been a victim. The company confirmed Wednesday that some computers running Hotmail, the software giant's free e-mail service, were infected by one of the worms.

Microsoft spokesman Jim Desler said servers had since been patched and that the company has been scanning its systems to make sure they're safe.

"We continue to take it very seriously," Desler said. To keep the spread of the Code Red worms from slowing down its cable Internet network, AT&T Corp. is blocking access to Web servers run by residential customers, a spokeswoman said Wednesday.

"We are trying to protect our greater user population as a whole," said Sarah Eder. AT&T provides cable Internet access to 1.35 million residential customers, she said.

By blocking incoming traffic to Web servers, AT&T is effectively shutting down the Web sites, which residential customers are not supposed to be operating anyway, Eder said.

"According to our official use policy, customers are not permitted to operate Web servers behind cable modems," she said.

Commercial customers of AT&T's cable Internet service are not affected, she added.

Memphis-based FedEx Corp., which uses the Internet to place orders and track packages en route to delivery, also had computers infected by Code Red, a spokesman said on Thursday.

"We had a few problems but nothing we weren't able to quickly fix," said FedEx spokesman Jim McCluskey. "We're running normally now."

The worm temporarily interfered with some "call for pickup" orders, McCluskey said. The worm also disrupted some Associated Press services delivered by the Internet on Wednesday. The AP outage did not affect transmission of AP's main news and photo services, which are delivered by satellite.

The worm delayed updates of The WIRE, AP's news Web site. It also affected a photo service used by smaller newspapers and several specialized sites, including sites for graphics and census information. The disruptions began at about 4 a.m. EDT Wednesday. Most services were restored by early afternoon. John Reid, AP's director of communications and technology, said all the infected computers had been "scrubbed" and were being checked to make certain they were secure.

Both versions of the Code Red worm attack only computers running Microsoft Windows NT or 2000 operating systems, with Internet Information Services (IIS) installed. Microsoft offers a software patch to protect computers from infection.

The economic cost of both worms has risen to nearly $2 billion, up from the previous week's estimate of $1.2 billion, according to Computer Economics, a Carlsbad, California, research company that keeps a tally of the projected damage caused by computer viruses.

"I would agree that this is going to end up being the most expensive incident across the board, with regard to the number of organizations that are having to foot the bill to clean it up," said Michael Erbschloe, vice president of research at the company.

Categorizing the "Love Bug" as a virus, Erbschloe called the Code Red worms the "biggest worm incidents in the history of the Internet."

Since its debut Saturday, Code Red II has managed to infiltrate internal networks of Internet service providers and other major companies. The proliferating worm can flood nearby machines with enough traffic to force Web sites offline, Net authorities said.

The rogue application, which disappears from computer memory after one or two days, secretly installs a backdoor on infected Web servers, making them vulnerable to hijacking.

The infection gives high-tech outlaws the ability to take control of tainted machines, steal any data they contain -- credit card numbers, sensitive passwords, other data -- and even launch additional attacks on the Net, computer security experts said.

"It's something we call collateral damage, but I don't mean that lightly," said Alan Paller, director of research for the SANS Institute. "This thing creates traffic inside a subnet, creates traffic in addition to what comes in from the outside."

"An awful lot of traffic is being sent, clogging the bandwidth. The worm has this magnifying effect" during attacks on internal networks, said Russ Cooper, owner and moderator of NTBugtraq, an electronic mailing list that discusses Windows security bugs.

In Virginia, one regional ISP affiliated with Cox Interactive Media suffered service outages on Monday and Tuesday.

At AOL Time Warner Inc., which offers the RoadRunner cable modem service, spokesman Mike Luftman said there had been "minimal impact" and no service outages from Code Red. (AOL Time Warner is the parent company of CNN.com.)

"There have been slight slowdowns, but those are geographically limited," said Luftman. "We've only identified about 1,000 customers whose computers have been infected."

ExciteAtHome Corp. spokeswoman Estela Mendoza said Code Red's impact on cable customers has been "minimal and not widespread," affecting less than 2 percent of its subscribers.

Code Red II is also infecting an increasing number of Chinese computers, but the number of cases reported in China was low compared to damage done overseas, a security expert said Thursday.

"Based on the figures, the speed is picking up," said Liang Hong of the government-run Computer Virus Treatment Center in Tianjin, 100 km (55 miles) from Beijing. But the number of cases reported to the center by Wednesday night was less than 100, Liang said. Beijing Rising Technology Corp, a virus protection company, said on Wednesday it had learned of 180 confirmed cases. But while Code Red II may be wreaking havoc on computer systems worldwide, so far it's been a bit of a yawn Down Under.

Computer security experts in Australia said on Thursday there had been relatively few reports of infections since the Code Red II worm. The Australian Computer Emergency Response Team at the University of Queensland, also called AusCERT, said there had been just 50 reports from institutions and the public -- a low number of incidents for a computer assault of this kind.

"No, it's not really affecting us," an AusCERT spokeswoman said. "From our perspective, Australian business is a little bit more cautious about security issues and they have been very good at getting patches."

John Donovan, managing director of the Australian arm of computer security firm Symantec Corp., agreed that few people or institutions had been affected.

In Japan, at least 200 computer servers may have been infected by the Code Red II worm, including some police computers, Kyodo news agency reported Wednesday.

The National Police Agency (NPA) was quoted by Kyodo as saying that there were signs in its server of the worm, which has not previously been reported in Japan.