(By Salman - iStockAnalyst Writer)US stocks fell sharply on Wednesday after a worse than expected employment report rattled investors ahead of Friday's key jobs data. Deteriorating corporate outlook also dampened the sentiment.

The Dow Jones Industrial Average retreated 245.16 points or 2.72% to finish at 8,769.70. The S&P 500 declined 28.06 points or 3% to end at 906.64. The Nasdaq Composite fell 53.32 points or 3.32% to 1,599.06.

In yet another sign of worsening job market, ADP survey on Wednesday reported that a total of 693,000 private-sector jobs were lost in December, worse than the forecast of 450,000.

Alcoa's announcement of massive job cuts also heightens concerns about the employment picture. Late on Tuesday, the largest US aluminum producer said that it will cut 13,500 jobs and reduce production by 18% due to continued slump in demand and prices of metal. Shares of Alcoa Inc. (NYSE: AA) plummeted $1.27 or 10.48% to $10.85

Intel Corp. (NASDAQ: INTC), the world’s largest semiconductor company, said on Wednesday that it expects fourth-quarter sales to drop 23% from the corresponding quarter as a result of further weakness in end demand and inventory reductions by its customers in the global PC supply chain.  
Santa Clara, California -based company said it now expects to report revenue of $8.2 billion in the quarter, down from $10.7 billion in the same quarter a year earlier. Intel shares tumbled 96 cents or 6.26% to $14.41 on Wednesday.

PC maker Hewlett Packard Co. (NYSE: HPQ) dropped $1.72 or 4.37% to $37.59. Microsoft Corp. (NASDAQ: MSFT) slumped $1.26 or 6.07% to $19.50.

Financial stocks were hammered. J.P Morgan (NYSE: JPM) slipped $1.83 or 6.12% to $28.05. Citigroup (NYSE: C) declined 33 cents or 4.42% to $7.13. American Express Co. (NYSE: AXP) retreated 99 cents or 4.70% to $19.90. Morgan Stanley (NYSE: MS) plunged $1.48 or 7.56% to $18.10. Bank of America Corp. (NYSE: BAC) and Goldman Sachs (NYSE: GS) slumped over 3.5% each.

Diversified firm General Electric (NYSE: GE) lost 78 cents or 4.645 to end at $16.08.

Energy stocks fell. Exxon Mobil (NYSE: XOM) and Chevron Corp. (NYSE: CVX) fell over 4%.

Shares of Time Warner Inc. (NYSE: TWX) slid 69 cents or 6.28% to $10.29 after the media giant said Wednesday that it expects to post full-year loss due to a fourth-quarter charge of $25 billion to write down the value of its cable, publishing and AOL assets. The company had earlier estimated to report earnings in the range of $1.04 to $1.07 for full year.

Walt Disney Co. (NYSE: DIS), the largest theme park operator, stumbled $1.23 or 5.06% to $23.08.

General Motors Corp. (NYSE: GM) was one of the few bright spots among the Dow components. Shares of the automaker rallied 20 cents or 5.08% to $4.15.
 
Monsanto Co. (NYSE: MON) soared $12.94 or 17.67% to $86.16 after the world's biggest seed maker announced that its first quarter net income nearly doubled to $556 million or $1 a share from $256 million or 46 cents a share in the same quarter last year.

Family Dollar Stores Inc. (NYSE: FDO) surged $3.48 or 14.305 after the discount retail c said that its fiscal first-quarter profit jumped 13.5% to $59.3 million, or 42 cents a share, from $51.9 million, or 37 cents a share, in the comparable quarter a year ago. Revenue grew to $1.75 billion from $1.68 billion in the same quarter in 2007.

Constellation Brands Inc. (NYSE: STZ) announced that its third-quarter earnings slipped to $83.5 million, or 38 cents a share, from $119.6 million, or 55 cents a share, in the year ago period. Excluding one time charges and items, the company earned $132 million, or 60 cents a share, compared to $121 million, or 55 cents a share, in the corresponding quarter in 2007.Shares of the company finished at $15.48, down $1.39 or 8.24% to $15.48.

The Mortgage Bankers Association said on Wednesday that Mortgage applications filed last week dropped a seasonally adjusted 8.2% on a week to week basis.

European stocks finished lower. The U.K. FTSE fell 131.41 points or 2.83% to 4,507.51. The DAX index of Germany and French CAC shed 1.77% and 1.49% respectively.

Asian stocks settled mixed. The Nikkei 225 advanced 158.40 points or 1.74% to close at 9,239.24.Hong Kong's Hang Seng Index fell 522.05 points or 3.37% to 14,987.46.

NYMEX Crude Oil for February delivery skidded $5.84 or 12% to settle at $42.74 on Wednesday as a report showed US stockpile level jumped more than expected last week. It was the largest one day drop in percentage terms since 2001.

Disclosure: Author does not own any of the stocks discussed here.