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US stocks fall sharply

New York - US stocks fell sharply Friday, with the tech-rich Nasdaq Composite Index sinking more than two percent following a gloomy outlook from a leading semiconductor company.

At the closing bell, the Dow Jones Industrial Average stood at 16 544, down 115.11 points (0.69%) and erasing the blue-chip index's gains for 2014.

The broad-based S&P 500 tumbled 22.16 (1.15%) to 1 906, while the Nasdaq slumped 102.10 (2.33%) to 4 276.

The retreat in US stocks followed dreary action in most overseas markets amid anxiety over global growth, as the German DAX slumped 2.4% and the French CAC 40 fell 1.6%.

Microchip Technology, whose semiconductors are used in electronics products, sank 12.3% as it slashed its revenue forecast for the upcoming quarter, due in part to poor performance in China.

The firm's chief executive, Steve Sanghi, said the decline is part of a correction that "will be seen more broadly across the industry in the near future."

Other semiconductor stocks suffered big drops, including Micron Technology (-9.1%), Texas Instruments (-7.0%) and STMicroelectronics (-6.0%).

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