NEW YORK (AP) - A warning from tech giant Intel about poor business conditions and more evidence of rising unemployment left stocks with their biggest losses in a month yesterday.

The news upended some investors' hopes for a speedy economic recovery this year and sent the major stock indexes down more than 2.5 percent, including the Dow Jones industrials, which lost 245 points.

Intel's second warning since November, as well as bleak outlooks from aluminum producer Alcoa and media industry bellwether Time Warner, underscored the breadth of the economy's slowdown. In addition, the ADP National Employment Report said private sector jobs fell by a greater-than-expected 693,000 in December. That made investors nervous ahead of tomorrow's employment report from the government.

But unlike the panicked declines seen last fall, today's pull-back was more orderly and stocks finished off their lowest levels of the session. Some retrenchment had been expected following sharp gains in recent sessions and a 24.2 percent rally in the Standard & Poor's 500 index since November 20 before yesterday's slide.

"Nothing goes straight up or straight down," said Keith Springer, president of Capital Financial Advisory Services. "You do have some people who get skittish and start taking some profits, but I don't think the up trend has been broken here."

Wall Street has been absorbing poor economic and corporate news far better since late November, with some investors betting on a recovery in the second half of this year or by early 2010. But the latest round of unnerving news was too proved to be too much to set aside.

Joe Saluzzi, co-head of equity trading at Themis Trading LLC, said the market was simply reacting to the day's drubbing of bad news.

"One too many punches and the fighter finally went down," he said.

Chip maker Intel Corp. said it now expects fourth-quarter revenue to drop a greater-than-expected 23 percent on a further weakening in demand from computer makers.

Other corporate news added to Wall Street's downbeat mood. Alcoa Inc. warned late on Tuesday it would slash its annual output by more than 18 percent and cut its global work force by 13 percent. And Time Warner Inc. said yesterday it plans to book a $25 billion impairment charge in the fourth quarter for its cable, publishing and AOL units.

Intel dropped 93 cents, or six percent, to $14.44. Alcoa tumbled $1.23, or 10 percent, to $10.89, while Time Warner sank 69 cents, or 6.3 percent, to $10.29.

Wall Street was already worried about what the Labour Department's report on employment would bring tomorrow. The government report is typically the most important economic reading each month because rising unemployment could endanger consumer spending, which accounts for more than two-thirds of US economic activity.

The concerns sent the Dow down 245.4, or 2.72 percent, to 8,769.7, its biggest point and percentage decline since December 1.

Broader stock indicators also tumbled. The Standard & Poor's 500 index fell 28.05, or three percent, to 906.65. It was the biggest drop for the index since December 1.

The Nasdaq composite index fell 53.32, or 3.23 percent, to 1,599.06, hit by the decline in Intel shares.

The Russell 2000 index of smaller companies fell 17.61, or 3.42 percent, to 497.1.

Declining issues outnumbered advancers by about four-to-one on the New York Stock Exchange, where volume came to a light 1.24 billion shares compared with 1.34 billion shares on Tuesday.

Bond prices were mixed yesterday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.49 percent from 2.47 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, edged fell to 0.11 percent from 0.14 percent.

The dollar fell against most other major currencies, while gold prices declined.

Light, sweet crude slumped 12 percent, falling $5.95 to settle at $42.63 a barrel on the New York Mercantile Exchange. The decline, which erased a week of gains, came after the government reported commercial crude oil inventories jumped well beyond the increase analysts expected. The weak economy has eroded demand.

The ADP report raised questions about whether government steps such as interest rate cuts to lower borrowing costs and possible spending on infrastructure will be sufficient to revive the economy.

"The market has shrugged off some bad news recently, and it's starting to get to the point where it can't do that anymore," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group.