US STOCKS-Year's winners lead Wall St slide as default angst rises
* Profit-taking hits 2013's winners
* Volatility jumps on lack of progress in Washington
* Alcoa, Yum Brands to report after the close
* Indexes down: Dow 0.8 pct, S&P 1 pct, Nasdaq 1.9 pct
NEW YORK, Oct 8 (Reuters) - U.S. stocks slid on Tuesday as traders cashed in gains in some of the year's best performers amid little progress to end a political crisis in Washington that could affect the U.S. fiscal standing and economic recovery.
A gauge of Wall Street anxiety hit its highest level in seven weeks as equity markets showed growing concern over a partial U.S. government shutdown and with only nine days left for Congress to raise the U.S. debt borrowing limit.
The technology sector was the biggest weight on the S&P 500, with investors selling stocks that have outperformed throughout the year.
Facebook was the biggest drag on the Nasdaq 100, down 5.7 percent to $47.52. Shares of LinkedIn lost 5.9 percent to $223.14, and Netflix fell 4.7 percent to $303.06. Netflix is the top performer this year on the S&P 500, and Facebook is among the top performers on the Nasdaq 100.
"With the uncertainty surrounding Washington dominating trading, today was the day the momentum names finally were hit hard," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio.
"Could we finally see a move to the safer blue chips? If the Washington drama continues, that could be the play."
President Barack Obama said a U.S. debt default could wreak havoc and he would talk to congressional Republicans about any topic but urged them to raise the debt limit without conditions.
The possibility the government could default on its debt raised fears of potential global economic catastrophe, with foreign creditors and the International Monetary Fund's chief economist warning of the potential consequences.
"I think what could be said is if there was a problem lifting the debt ceiling, it could well be that what is now a recovery would turn into a recession or even worse," IMF chief economist Olivier Blanchard said. He added, however, such an event did not appear likely.
The Dow Jones industrial average fell 118.61 points or 0.79 percent, to 14,817.63, the S&P 500 lost 16.41 points or 0.98 percent, to 1,659.71 and the Nasdaq Composite dropped 70.508 points or 1.87 percent, to 3,699.869.
The S&P is down 3.8 percent from its record closing high set three weeks ago.
The CBOE Volatility Index, a measure of investor anxiety, ticked above 20 for the first time since June 24 as investors are now willing to pay more for protection against a sudden drop on the S&P 500.
The VIX, up 22 percent in the past two days, shot up 27 percent in the last week of 2012 partly on the political stalemate surrounding the 'fiscal cliff' negotiations, before falling 39 percent the first week of this year after a deal was reached in Washington.
After Tuesday's market close, former Dow component Alcoa will report earnings, as will KFC's parent Yum! Brands .
McKesson Corp rose 3.3 percent to $133.89 after Dow Jones Newswires reported the company was in advanced talks to take over Celesio in a possible $5.1 billion deal.
Xerox Corp shares fell 2.2 percent to $10.17 after it said the U.S. Securities and Exchange Commission was investigating some accounting practices at Affiliated Computer Services, an IT outsourcing firm it bought in 2010.
J.C. Penney Co Inc rose 2 percent to $7.87 after the struggling retailer reported a smaller decline in same-store sales for September compared with August and said it was seeing positive signs in many areas of its business.