Wall Street took a dive yesterday, as the US government said personal incomes fell more than expected in July and Dell reported disappointing results.

The US Commerce Department reported that personal incomes fell 0.7 percent in July. It was the first decrease since August 2005 and worse than the 0.1 percent decrease that analysts had expected. Meanwhile, consumer spending rose a modest 0.2 percent, in line with previous estimates. But the reading increased 0.6 percent in June.

The decline of personal income overshadowed a better-than-expected reading of University of Michigan consumer sentiment index.

Lower-than-expected earnings from Dell dragged down technology-heavy Nasdaq. Dell fell 14 percent, after the company's profit margins came in well below what analysts had expected due to the decrease of product prices. Meanwhile, analysts from Citigroup and Bank of America cut target price for the world's second-largest personal-computer maker.

The Dow Jones fell 171.22, or 1.46 percent, to 11,543.96. Broader indexes also traded lower. The Standard & Poor's 500 index dipped 17.85, or 1.37 percent, to 1,282.83; and the Nasdaq fell 44.12, or 1.83 percent, to 2,367.52.