Wall Street slides on recession fears

NEW YORK (Reuters) - Stocks slid on Tuesday as fears the global economy may not avert recession slammed shares of technology and consumer companies, eclipsing a government rescue plan for banks.

Shares of Intel were among the top drags on Nasdaq as investors worried about the chipmaker's quarterly results, which are due after the closing bell. Intel lost 7 percent to $15.80 on Nasdaq, while an index of semiconductor stocks slid 5.5 percent.

Disappointing results and outlook from soft drink company PepsiCo further fueled worries about the earnings season. The company's weaker-than-expected earnings also deepened concerns about how consumer spending will hold up in the face of declines in home values and stocks, as well as tighter credit. PepsiCo's shares tumbled 12.9 percent to $53.80.

Financial shares were buoyed, however, by the Treasury Department's plan to inject $250 billion into major banks to stabilize the financial system in hopes of averting further damage to the economy. Among the gainers, Morgan Stanley surged more than 15 percent to $20.87.

"While a lot of news has been focused on financials, there is a slow motion tsunami coming our way as far as the economy is concerned," said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.

"Techs are cyclicals and have heavy exposure overseas, and the global economy is feeling a greater brunt of the slowdown," Goldman said.

The Dow Jones industrial average fell 259.73 points, or 2.77 percent, to 9,127.88, while the Standard & Poor's 500 Index dropped 26.18 points, or 2.61 percent, to 977.17. The Nasdaq Composite Index was down 83.25

points, or 4.51 percent, at 1,761.00.

Energy companies also fell as the price of oil slid on growing worries that a recession would curb the demand for oil. Exxon Mobil's stock dropped 5.8 percent to $68.87 and was among the top drags on the Dow. U.S. crude oil futures for November delivery fell $2.56, or 3.15 percent, to settle at $78.63 a barrel on the New York Mercantile Exchange.

Coca-Cola was the biggest drag on the Dow, on investor concerns that rival soft-drink maker Pepsi's weak results may indicate weakness in the rest of the beverage sector. Coca-Cola shares fell 9.5 percent to $42.77.

An index of retail stocks fell 6.1 percent on worries about consumer spending.

Citigroup and Bank of America ranked among the Dow's biggest percentage gainers. Citigroup climbed 14.5 percent to $18.03, while Bank of America surged 12.3 percent to $25.60. They are among the institutions widely reported to be included in the Treasury Department's plan to take equity stakes in banks to shore up the battered financial system.

The Treasury Department did not name the nine banks that will initially be participating in the program.

On a positive earnings note, Johnson & Johnson beat expectations with strong sales of consumer products and medical devices. J&J's stock rose 0.9 percent to $63.26.

(Reporting by Kristina Cooke; Editing by Jan Paschal)