Wall Street slides on profit-taking

Wall Street has made an expected retreat sending technology and blue chip stocks sliding on a mix of profit-taking and earnings warnings.

The Dow closed down 162.19 at 9,785.35, while tthe Nasdaq composite index fell 118.15, or 6% to 1,854.11.

The Standard & Poor's 500 index was down 28.88, or 2.4% at 1,153.29, and the Russell 2000 index slipped 10.68 to 442.20.

The sell-off was no surprise. An earnings warning from Nortel Networks after regular trading ended on Tuesday sent tech stocks down in the market's extended session, and set Wall Street up for the sale.

Nortel, which also announced another 5,000 job cuts for a total of 15,000 planned this year, fell 16%.

The news hurt other networking stocks, including Cisco Systems, which tumbled to a 13% loss.

Investors also pummelled Palm after the company announced job cuts and reduced its quarterly forecast. A similar announcement from Disney dropped its stock.

Beverage and health care stocks were among the few winners, reflecting investors' desire for less risky investments in the uncertain economy. Adolph Coors rose while Merck also advanced.

All three indexes had been up since late last week, when they began to recover from a slump that sent them to some of their lowest levels in more than two years.

A better-than-expected consumer confidence report on Tuesday, which suggested consumer spending might be able to lift the economy out of its current malaise, added to buyers' enthusiasm.

Declining issues led advances more than two to one on the New York Stock Exchange. Volume came to nearly 1.30 billion, compared with 1.31 billion at the same point yesterday.