Stocks in biggest fall in a month on jobs and tech

By Chuck Mikolajczak

NEW YORK (Reuters) - Stocks suffered their worst decline in more than a month on Wednesday after a grim private-sector jobs report coupled with a revenue warning from top chip maker Intel Corp (INTC.O: Quote) revived deep concerns about the economy.

Energy shares slid after data showed an abundance of crude oil inventory in the United States, the world's largest energy consumer, with demand eroded by the economic slowdown. U.S. crude futures slumped more than 12 percent.

Two days ahead of the U.S. government's key nonfarm payrolls report for December, a worse-than-expected private-sector jobs report highlighted the challenges facing President-elect Barack Obama as he makes plans for a large economic stimulus package.

Recession fears were heightened after Intel said its revenue for the fourth quarter would not meet the lowered forecast it had given in November, citing weakening demand for personal computers.

Intel, the world's biggest maker of the central processing units at the heart of every PC and a technology bellwether, was among the main laggards on the Nasdaq.

The Intel news compounded negative sentiment from aluminum producer Alcoa's (AA.N: Quote) announcement late Tuesday it would cut more than 15,000 jobs, halve capital spending and sell businesses to weather the global downturn.

"Reality set back in," said Fred Dickson, market strategist and director of retail research at D.A. Davidson & Co in Lake Oswego, Oregon. "Investors were expecting bad news on the earnings front and the Alcoa news combined with Intel reminded investors how bad things really are".

The Dow Jones industrial average .DJI fell 244.68 points, or 2.71 percent, to 8,770.42. The Standard & Poor's 500 Index .SPX dropped 28.00 points, or 3 percent, to 906.70. The Nasdaq Composite Index .IXIC tumbled 53.32 points, or 3.23 percent, at 1,599.06.