* Profit, economic worries hurt tech stocks
* U.S. Treasury says to pump $250 billion into banks
* Bank stocks advance on Treasury plan
* PepsiCo slumps on profit miss
* Dow off 0.8 pct, S&P 500 off 0.9 pct, Nasdaq off 2.7 pct
(Updates to late morning)
By Ellis Mnyandu
NEW YORK, Oct 14 The Nasdaq fell in choppy
trading on Tuesday as investors sold technology shares on fears
that fallout from the credit turmoil would hurt profits despite
the U.S. government's plan to invest in banks to shore up the
The Dow and S&P 500 were moderately higher after a sharp
rise at the open. Concerns about the broad profit outlook
overshadowed the Treasury Department's plan to inject $250
billion in major banks to stabilize the financial system in
hopes of averting further damage to the economy.
A profit miss by soft drink company PepsiCo (PEP.N) , whose
shares were down 9 percent, added to worries over how consumer
spending will hold up against declines in home values, stocks
and tighter credit.
On Nasdaq, shares of chip maker Intel Corp (INTC.O) fell
more than 5 percent to $16.02 before it reports quarterly
results after Tuesday's closing bell.
The semiconductor index was off nearly 4 percent, a day
after Wall Street roared back from its worst week ever with one
of its best single days ever on Monday.
"We may be trying to establish the floor with the credit
crisis, and that's why you had the euphoria in the last day and
a half," said Alan Lancz, president of Alan B. Lancz &
Associates Inc investment advisory firm in Toledo, Ohio. "Now
people are starting to look at how much damage the credit
crisis has done to the economy and earnings."
The Dow Jones industrial average .DJI rose 58.86 points,
or 0.63 percent, to 9,446.47. The Standard & Poor's 500 Index
.SPX climbed 6.59 points, or 0.66 percent, to 1,009.94. The
Nasdaq Composite Index .IXIC slid 24.42 points, or 1.32
percent, to 1,819.83.
Shares of software maker Microsoft Corp (MSFT.O) declined
more than 5 percent to $24.17. Computer maker Dell DELL.O
slide nearly 6 percent to $14.32.
"Tech is economically sensitive. The critical area now is
what kind of follow-through we get. I think it's going to be
difficult because we're now going to be looking at earnings
numbers. Forecasts are probably too high and have to be cut,"
Pepsico shares $5.72 to $56.05.
Not all the earnings news was bad. Johnson & Johnson
(JNJ.N), fueled by strong sales of consumer products and
medical devices, reported third-quarter earnings that beat Wall
Street expectations. Its shares rose 4 percent to $65.03.
Washington's plan to take stakes in major banks mirrors
steps already taken by Britain and announced by other
governments around the world, including Germany and France, to
stabilize the financial system and restore confidence after
recent market turmoil.
Shares of Citigroup (C.N) rose 16 percent to $18.25. The
S&P financial sub-index .GSPF was up 3.8 percent.
(Editing by Kenneth Barry)