Stocks fell as twin uncertainties hung over the market - the imminent start of one of the weakest earnings-reporting seasons in a decade and the unknown course of the US-led bombing in Afghanistan. Semiconductor stocks such as Intel - one of the Dow 30 components - sagged after Wall Street firms lowered expectations for the sector and investors locked in profits after recent gains. Intel fell 79 cents, or 3.55 per cent, to $21.45.

Microsoft also weighed on market indexes after the US Supreme Court rejected the software giant's request to overturn an earlier ruling that it violated US antitrust laws. Microsoft, also a Dow component, dropped $3.48, or 6 per cent, to $54.56.

Chipmakers tumbled after ABN AMRO analysts said the semiconductor industry would see sales growth slow to a long-term average of 10 per cent, rather than the 14 per cent that stock markets have factored into current share prices. Also, Merrill Lynch trimmed its estimates on many semiconductor firms. The Philadelphia Stock Exchange semiconductor index fell nearly 6 per cent.