Stocks fell sharply yesterday cutting major indices to 12week lows as jittery investors weighed disappointing corporate forecasts on the eve of the quarterly-earnings onslaught. The Dow Jones industrial average slumped 123.83 points, or 1.20 percent, to close at 10,175.57, according to the latest data, while the Nasdaq composite index fell 63.97 points, or 3.16 per cent, to 1,962.74. The broad Standard & Poor's 500 index dropped 17.26 points, or 1.44 per cent, to 1,181.52. For the three market indices, it was the lowest close since mid-April.

Investors are bracing for almost 300 financial reports this week and 1,500 next week as the second-quarter reporting season gathers steam, according to research firm Thomson Financial/First Call.

Among the stocks in focus was Corning, the optical-telecoms giant whose shares fell 98 cents, or 6.5 per cent, to $14.12 after saying it will cut jobs, close plants and take $5.1 billion in charges amid a telecom slump that could last another 12 to 18 months.