* Intel's 4th qtr warning hurts tech; stock off 4.1 pct
* ADP jobs data adds to worries on depth of the recession
* Energy shares drop after larger-than-expected inventory
* Dow off 1.8 pct, S&P 500 off 1.9 pct, Nasdaq off 2 pct
(Updates to midday, changes byline)
By Deepa Seetharaman
NEW YORK, Jan 7 (Reuters) - U.S. stocks slid on Wednesday
after a report showing a larger-than-expected drop in
private-sector jobs and a revenue warning from top chip maker
Intel Corp <INTC.O> added to signs that the recession is
deepening.
Coming two days before a critical U.S. governmewnt nonfarm
payrolls report, the ADP jobs data highlighted the challenges
facing President-elect Barack Obama as he pushes ahead with a
proposed stimulus package that could create up to 3 million
jobs.
Economic concerns were compounded after Intel said its
fourth-quarter revenue would be below its prior estimates as
demand for personal computers weakened worldwide. The
technology bellwether was among the main laggards on the
Nasdaq. For details, see []
The news came at the heels of aluminum producer Alcoa's
<AA.N> announcement late Tuesday that it would cut more than
15,000 jobs, halve its capital spending and sell businesses to
weather the global economic downturn. []
"I think people were getting a little bit more hopeful and
optimistic at the turn of the year," said William Lefkowitz,
options strategist at brokerage firm vFinance Investments in
New York. "However Intel's announcement today of a dismal
fourth quarter dampens some of that enthusiasm.
"Those negative comments have hurt technology stocks and
across the market in general."
The Dow Jones industrial average <> slumped 165.99
points, or 1.84 percent, at 8,849.11. The Standard & Poor's 500
Index <.SPX> fell 18.11 points, or 1.94 percent, at 916.59. The
Nasdaq Composite Index <> tumbled 33.26 points, or 2.01
percent, at 1,619.12.
Energy shares slid after inventory data showed crude oil
and refined product supplies rose more than expected last week,
with oil demand eroded by the economic slowdown. U.S. crude
futures were down as much as 8 percent.
Chevron <CVX.N> and ExxonMobil <XOM.N> were the top drags
on the Dow, while the S&P index of energy stocks tumbled 3.4
percent. Chevron lost 3.7 percent to $74.53, while Exxon shed
2.1 percent to $78.60.
After five days of gains, technology shares were among the
biggest weight on the market after Intel's warning, indicating
the heavy toll from the economic slump on both business and
consumer spending.
Intel shares fell 4.3 percent to $14.70 on the Nasdaq,
while Apple <AAPL.O> stock lost 1.3 percent to $91.77 and
Microsoft <MSFT.O> shed 3.1 percent to $20.12.
The S&P 500 index of technology shares <.GSPT> fell 2.5
percent and the semiconductor index <.SOXX> was down about 4
percent.
In a sign of how fallout from the recession is spreading,
media company Time Warner Inc <TWX.N> forecast a fourth-quarter
loss, sending its stock down nearly 6.3 percent to $10.29.
[].
According to ADP, a private employment service, U.S.
private employers shed 693,000 jobs in December, up sharply
from the revised 476,000 jobs lost in November and far more
than economists estimated.
Obama, set to be sworn in on Jan. 20, has proposed the
largest U.S. infrastructure investment since the 1950s and
massive tax cuts for consumers and businesses.
The new U.S. Congress began work to pass a stimulus
package. Obama expects to inherit a budget deficit approaching
$1 trillion and says his administration will have to make tough
budget choices.
The benchmark S&P 500 <.SPX> has risen 21 percent since its
Nov. 21 low.
Sentiment was also knocked after Satyam Computer Services
<SAY.N> <SATY.BO>, India's fourth-largest software services
exporter, had falsely inflated its earnings for years.
[].
The fraud at the company could add to investor anxiety
about the integrity of the markets, said Rick Meckler,
president of investment firm LibertyView Capital Management in
New York.
(Additional reporting by Doris Frankel; Editing by Leslie
Adler)
