New York ? A disappointing outlook from AOL Time Warner put investors on the defensive Tuesday, prompting them to question the strength of other big companies and bid stocks sharply lower.

The downturn, which extended a decline that began Friday, wasn’t surprising given how far stock prices have come recently, with the Dow Jones industrials posting eight straight weekly wins and the broader market advancing for seven of the past eight weeks.

While investors are growing more confident about the economy and earnings, they are expected to cash in some profits, especially amid the uncertainty over whether there will be a war with Iraq.

“At these levels, the market is in pullback mode,” said Gary Kaltbaum, market technician for Investors’ Edge Partners.

Wall Street’s losers included companies scheduled to issue earnings outlooks later in the week, a sign that investors were feeling skittish about the health of other big companies.

Dow industrial Merck dropped $1.13 to $58.82 ahead of its yearly forecast on Thursday. Intel, also a Dow stock, fell 74 cents to $20.31 ahead of Thursday’s mid-quarter update.