Adding pressure to technology shares, the Goldman Sachs Group lowered its ratings on both hardware and software stocks based on its latest survey of corporate officers who oversee high-tech spending. With corporate forecasts falling short of expectations and a number of signals pointing to more modest capital spending, worries about a slower second half were intensifying, but analysts say it's too soon to tell what lies ahead.

"We've been saying for a while that investors need to be much more selective O this is a stock-picking kind of market," said John Caldwell, chief investment strategist for McDonald Financial Group. "It may be that Coke's problems are just Coke's problems. On the flip side of that, there are a number of companies out there that are saying relatively good things."

According to preliminary results, the Dow Jones industrial average slid 86.80, or 0.8 percent, to 10,231.36.

The other gauges were also lower. The Nasdaq composite index slumped 18.88, or 1 percent, to 1,896.52. The Standard & Poor's 500 index lost 7.96, or 0.7 percent, to 1,120.37.

The Federal Reserve reported only a 0.1 percent rise in industrial production in August, surprising economists who had forecast a 0.5 percent gain. The feeble rise, which follows a robust 0.6 percent advance in July, suggests the economy may still be working through the "soft patch" that Federal Reserve Chairman Alan Greenspan referred to in remarks before Congress last week.

In addition to disheartening news on both the economic and corporate fronts, light trading ahead of Rosh Hashanah, the Jewish New Year, contributed to the downward pressure on stocks. Still, after more than a month of decent gains, analysts said it made sense for equities to take a pause on less-than-encouraging news.

"These pre-announcements, which are abundant and quite negative compared to what we saw in the second quarter, are off-putting, of course," said Larry Wachtel, market analyst at Wachovia Securities. "But the major factor is you've come a long way and you need a rest."

Energy costs have also been a persistent worry for investors, and uncomfortably high oil prices headed skyward this week as Hurricane Ivan menaced rigs, threw tankers off course and significantly cut daily production in the Gulf of Mexico. Prices fell back as the storm took aim at the Alabama and Mississippi coasts late today, and light, sweet crude for October delivery declined 81 cents to settle at $43.58 per barrel.

Dow component Coca-Cola fell 4 percent, or $1.71, to $41.16, after warning that results for the second half of the year were likely to fall short of expectations because of weaker sales and challenging conditions in key markets.