Stocks retain heavy losses

US stocks came off their lows after midday yesterday, but clung to heavy losses, ahead of US Secretary of State Colin Powell’s remarks to the United Nations today and Cisco’s earnings report, due after the close.

A surprise charge from insurer AIG and negative reports from some telecom names also drove shares lower.

Just before 1.40pm ET, the Nasdaq composite, down 19.87 to 1303.92, Dow Jones industrial average, down 107.02 to 8002.80 and Standard & Poor's 500 index, down 13.65 to 846.67, all sank about 2%.