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STOCKS FALL ON POOR OUTLOOKS

Wall Street retreated Tuesday after forecasts from DuPont, Sun Microsystems and Texas Instruments raised fears that companies' outlooks for the fourth quarter and beyond could indeed signal a severe economic downturn. After logging sharp gains the previous session, the Dow Jones Industrial Average fell 2.5 percent, while the Nasdaq composite index lost more than 4 percent following a weak showing by technology names.

Some pullback was to be expected after the Dow shot up 413 points Monday. But investors poring over a mix of companies' third-quarter reports found enough unsettling outlooks to set off heavy selling.

Still, analysts said investor anxiety appears to have lessened considerably compared with the previous two weeks when fears about a dearth of available credit and the health of the economy battered stocks across the globe.

Strains in the credit markets eased further in response to a sweeping series of bailout measures by world governments, including a joint U.S. and European plan to buy stakes in private banks to boost to their lending. Demand for Treasury bills, regarded as the safest assets around, remained improved from last week in a sign that credit markets are gradually returning to a healthy state.

But analysts have warned that the market will see a stretch of volatile sessions as Wall Street recovers from this month's huge drop. Although investors have been expecting third-quarter earnings, and even fourth-quarter forecasts, to reflect the damage from the financial system's problems, the reality of companies' reports have been unnerving.

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