* Worry over broad profit outlook hurts techs
* PepsiCo slumps on earnings miss
* Bank stocks advance on Treasury's $250 billion plan
* Dow off 0.8 pct, S&P off 0.5 pct, Nasdaq off 3.5 pct
(Updates to close)
By Kristina Cooke
NEW YORK, Oct 14 (Reuters) - U.S. stocks fell on Tuesday
as fears that the global economy may not avert recession
slammed shares of technology and consumer companies, eclipsing
a government rescue plan for banks.
A day after the Dow leaped 936.42 points in its biggest
one-day point gain ever, investors looked past the U.S. pledge
to pour $250 billion into major banks and instead focused on
the dismal outlook for earnings and the economy.
A disappointing outlook from PepsiCo <PEP.N> further
fueled those worries, especially given that soft drinks and
snacks are usually seen as safer bets when the economy
falters. PepsiCo's shares had their worst day since the 1987
stock market crash.
The Nasdaq underperformed throughout the day. Intel
<INTC.O> was among the top drags on the Nasdaq as investors
worried about the chipmaker's quarterly results, which are due
after the closing bell. Intel lost 6.2 percent to $15.93 on
Nasdaq, while an index of semiconductor stocks <.SOXX> slid 5
percent.
Financial shares rose, however, after the U.S. Treasury's
latest step to stabilize the financial system in hopes of
averting further damage to the economy. Citigroup jumped 18.2
percent and Bank of America climbed 16.4 percent.
"While a lot of news has been focused on financials, there
is a slow motion tsunami coming our way as far as the economy
is concerned," said Steve Goldman, market strategist at Weeden
& Co in Greenwich, Connecticut.
"Techs are cyclicals and have heavy exposure overseas, and
the global economy is feeling a greater brunt of the
slowdown," Goldman said.
The Dow Jones industrial average <> was down 76.62
points, or 0.82 percent, at 9,310.99. The Standard & Poor's
500 Index <.SPX> was down 5.34 points, or 0.53 percent, at
998.01. The Nasdaq Composite Index <> was down 65.24
points, or 3.54 percent, at 1,779.01.
Energy and materials companies also fell as the price of
oil slid on growing worries that a recession would curb the
demand for oil and other commodities. Chevron <CVX.N> shares
fell 1.9 percent to $68.54.
U.S. crude oil futures <CLc1> for November delivery fell
$2.56 or 3.15 percent, to settle at $78.63 a barrel on the New
York Mercantile Exchange.
PepsiCo's weaker-than-expected earnings also deepened
concerns about how consumer spending will hold up in the face
of declines in home values and stocks, as well as tighter
credit. PepsiCo's shares tumbled 11.9 percent to $54.40.
Coca-Cola <KO.N> was the biggest drag on the Dow, on
investor concerns that rival soft-drink maker Pepsi's weak
results may signal weakness in the rest of the beverage
sector. Coca-Cola shares fell 7.5 percent to $43.73.
An index of retail stocks <.RLX> fell 4 percent on
worries about consumer spending.
Apple Inc <AAPL.O> shares fell 5.6 percent to $104.08
after it cut the price on its entry-level notebook computer to
$999 in a move expected to attract budget-minded buyers at a
time when recession fears loom over the global economy.
Citigroup <C.N> and Bank of America <BAC.N> ranked among
the Dow's biggest percentage gainers. Citigroup climbed 18.2
percent to $18.62, while Bank of America surged 16.4 percent
to $26.53. They are among the institutions widely reported to
be included in the Treasury Department's plan to take equity
stakes in banks to shore up the battered financial system.
The Treasury did not name the nine banks that will
initially be participating in the program.
Trading was moderate on the New York Stock Exchange, with
about 1.88 billion shares changing hands, below last year's
estimated daily average of roughly 1.90 billion, while on
Nasdaq, about 2.89 billion shares traded, above last year's
daily average of 2.17 billion.
Advancing stocks outnumbered declining ones on the NYSE by
17 to 15, while on the Nasdaq, decliners beat advancers by
about 2 to 1.
(Reporting by Kristina Cooke; Editing by Jan Paschal)
