Stocks fell sharply yesterday as investors girded themselves for earnings reports amid persistent worries and fresh concerns about technology stocks.

Downgrades of two chip makers early in the day pulled technology issues lower, as the market awaited after-hours earnings reports from two of Wall Street's most high-profile companies, Yahoo! and Motorola.

The tech-heavy Nasdaq composite index closed down 115.00, or 3.4 per cent, to 3,240.56.

The Standard and Poor's 500 index dropped 15.01, or 1.1 per cent to 1,387.02.

The Dow Jones industrial average tumbled 44.03, or 0.4 per cent, to 10,524.40.