Stocks extended declines in late afternoon yesterday, with the Nasdaq falling 6 per cent, as investors stampeded after warnings from telecom gear supplier Nortel Networks Corp and hand-held computer maker Palm Inc reawakened fears the slowing economy will hurt stocks further.

"People are still concerned we're heading for a recession and a serious profit slump," said Mr Kevin Bannon, chief investment officer at BNY Asset Management, which oversees about $60 billion in assets. The Nasdaq Composite Index skidded 118.28 points, or 6.00 per cent, to 1,853.98, as Nortel and Palm swept high-techs lower with their profit warnings.