The Dow Jones slid more than 170 points after disappointing news from International Paper and Duke Energy.

The Dow Jones fell 176.93 to close at 8,317.34 due to fears that stocks will not hold gains from their recent two-week surge of some 1,200 points.

The Nasdaq declined 21.39 to 1,298.66. The Standard & Poor's 500 index dropped 13.64 to 882.50, while the Russell 2000 index fell 2.95 to 366.00.

Decliners included General Electric, which dropped 90 cents to $26, and International Paper, which fell 90 cents to $36.84, on a brokerage downgrade from Prudential.

Duke Energy dropped $1.06 to $19.08 after reporting that third-quarter profit tumbled 71%. The company is also cutting 1,500 jobs, citing weakness in the US economy.

The market falls came despite a Labour Department report showing that new claims for jobless benefits fell last week by a seasonally adjusted 25,000 to 389,000, the lowest point since October 5.

Dow Chemical dropped $2.57 to $24.97, despite posting a doubling in third-quarter earnings. The results met expectations.

Microsoft fell $1.97 to $51.23 after the Justice Department said it was investigating whether the software company is hiding details about its Windows operating system from competitors, according to the Los Angeles Times.

Gainers included AOL, which rose $1.02 to $14.55, after the media company reported a small third-quarter profit but said it would restate its financial results for a two-year period.

Declining issues outnumbered advancers 15 to 11 on the New York Stock Exchange. Volume was moderate.