Stocks slumped yesterday, pushing the tech-heavy Nasdaq to its lowest level in almost four months, on resurfacing worries that sagging corporate profits are unlikely to turn around any time soon.

"People are very cautious," said Mr Rick Meckler, president of investment firm Liberty View. "People don't have the same willingness to bottomfish and look out another year." The sluggish US economy was supposed to have begun perking up by now, pumped up by cheaper credit and tax rebates.

Instead, its woes are proving to be longer-lasting than many had thought, and US companies are expected to post the worst profit decline in a decade. The stock market has made little progess in the past few weeks as wary investors avoid buying shares until proof of an economic turnaround is in hand.

"A lot of market participants think there is no rush to buy stocks and no rush to sell them until they see what is in store for the economy," said Mr Peter Coolidge, senior equity trader at Brean Murray & Co.