US stocks fell sharply yesterday, as Asia's economic woes pushed the technology and financial sectors farther along their three-day downslide.

On Wall Street, the Dow Jones industrial average dropped 129.80 points - or 1.63 per cent - at 7,848.99.

Earlier in the day, the index had dropped more than 160 points.

Banking and high-tech shares continued the heavy losses that hurt the market on Wednesday as more companies warned of upcoming earnings trouble.

Quantum Corp, a maker of disk drives, was one of Nasdaq's heaviest losers, falling more than four. After the close of trading on Wednesday, Quantum said weakness in Asian markets will hurt its earnings in the current quarter.

Similarly, Applied Materials Inc tumbled after Merrill Lynch and Co downgraded its rating on the semiconductor equipment company.