Stocks slide on banks and large-cap techs

NEW YORK (Reuters) - Stocks fell to their worst day in nearly two months on Tuesday as President Barack Obama took office amid growing troubles in the banking sector and grim profit outlooks that hurt stocks across the board.

"The decline stems from the financials and the banks and from those who fear that the banks will go the way of Fannie Mae and Freddie Mac," said Carl Birkelbach, head of Birkelbach Management in Chicago.

"In other words, they will be taken over by the government in many cases and the shareholders will lose out."

The slide in the Nasdaq was led by large-cap technology companies, including Apple Inc and Microsoft Corp , down 4.6 percent and 5.7 percent respectively, ahead of the release of International Business Machines' quarterly results after the closing bell.

State Street Corp led the decline in financials after the world's largest institutional money manager posted a $6.3 billion unrealized loss in its investment portfolio and lowered its outlook. Its shares plummeted almost 58 percent to $15.35 on the NYSE

The Dow Jones industrial average <.DJI> fell 287.53 points, or 3.47 percent, to 7,993.69. The Standard & Poor's 500 Index <.SPX> slid 38.19 points, or 4.49 percent, to 811.93. The Nasdaq Composite Index <.IXIC> tumbled 74.06 points, or 4.84 percent, to 1,455.27.

The fall marked the worst percentage declines for the Dow and the S&P 500 since December 1, 2008.

The broad S&P 500 index has fallen 10.5 percent this year as the global recession deepens.

(Reporting by Rodrigo Campos; Editing by Jan Paschal)