Stocks stabilized in negative territory Tuesday as worries about the outcome of the U.S. retaliatory strikes in Afghanistan weighed on a market that expects little good news in upcoming profit reports. 

This week marks the start of the third-quarter earnings season, when companies report financial results and hint at what is to come later in the year. Profits are expected to fall more than 20 percent — the worst quarterly performance in a decade. 

The blue-chip Dow Jones industrial average fell 15.50 points, or 0.17 percent, to end at 9,052.44, and the Nasdaq Composite index, hurt by weakness in computer-chip and related stocks, sank 35.78 points, or 2.23 percent, to 1,570.17. The broader Standard & Poor's 500 index fell 5.69 points, or 0.54 percent, to 1,056.75.

"This is a wait-and-see game. Between earnings about to be announced and the ongoing conflicts in Asia, it doesn't pay for anyone to really go out on a limb," said John Forelli, senior vice president at Independence Investment LLC.

Semiconductor stocks such as Intel Corp. — one of the Dow 30 components — sagged after Wall Street firms lowered their expectations for the sector and investors locked in profits after recent gains.

Intel fell 79 cents, or 3.55 percent, to $21.45.

Software maker Microsoft Corp. also weighed on market indexes after the U.S. Supreme Court rejected the software giant's request to overturn an earlier ruling that Microsoft violated U.S. antitrust laws. Microsoft, also a Dow component, dropped $3.48, or 6 percent, to $54.56.

Chipmakers tumbled after ABN AMRO analysts said the semiconductor industry will see sales growth slow to a long-term average of 10 percent, rather than the 14 percent that stock markets have factored into current share prices.

Also, Merrill Lynch trimmed its estimates on many semiconductor firms after their survey indicated a 15 percent to 20 percent drop in semiconductor capital spending in 2002.

The Philadelphia Stock Exchange semiconductor index fell nearly 6 percent.

Stock indexes lost more than 11 percent in the first week of trading after the Sept. 11 attacks on the World Trade Center and Pentagon, but they have since trimmed their losses. 

Traders said the recovery was likely short lived as Wall Street worries about the outlook for stocks and the economy as U.S.-led military strikes continued for a third day. Others are afraid there may be other terror attacks on U.S. soil. 

"There is uncertainty about how long this war is going to go on and the implications for the economy,'' said Robert Cohen, a trader for Credit Suisse First Boston. "We've never seen anything similar to this in terms of the impact for the U.S. homeland.''

Motorola slipped 44 cents to $16.95 ahead of the release of its results after Tuesday's close. The cellular phone maker is expected to report its third consecutive quarterly loss, hit by a slowdown in demand for cell phones and losses by its chipmaking unit. 

"Motorola is probably the biggest news for today because it's the first major technology company reporting so far this quarter,'' said Cohen.

Traders said money managers are worried about the cost and duration of a sustained military campaign in response to the Sept. 11 attacks.

"There is a lot going on,'' said Frank Gretz, market analyst for brokerage Shields & Co. "The market is worried about every little thing like anthrax, another attack on the U.S., doing something badly militarily and earnings, of course.'' 

Not all earnings news was bad, though. First Data Corp., which provides the electronic networks used for most credit card purchases in the United States, jumped $4.40 to $61.40 after its earnings rose 15 percent.

Declining issues outnumbered advancers nearly 8 to 7 on the New York Stock Exchange. Volume was 1.15 billion shares, compared with 976.87 billion traded Monday.

The Russell 2000 index, the gauge of smaller company stocks, fell 3.50 to 408.68.

Overseas markets were mixed Tuesday. Japan's Nikkei stock average finished the day down 1.9 percent, while stocks in Europe fared better. France's CAC-40 ended the day with a slight gain, up 0.1 percent, Britain's FT-SE 100 rose 0.5 percent, and Germany's DAX index slipped 0.3 percent.

Reuters and the Associated Press contributed to this report.