A sharp sell-off in Chinese and other global markets set the stage for the turbulent day on Wall Street.
THE QUOTE: "You've seen more discouraging (company) commentary this quarter than you have the last two", said Tom Martin, senior portfolio manager with Globalt Investments.
The S&P 500 fell 48 points, or 1.8 per cent, to 2,706.
The Nasdaq Composite Index tumbled 4.4 percent Wednesday, the most in more than seven years, erasing nearly $33 billion from the fortunes of technology's 61 richest people, according to the Bloomberg Billionaires Index.
Technology and health care companies also took heavy losses Tuesday.
"The fear is palpable in stock markets at the moment", Greg McKenna, a markets strategist at McKenna Macro, wrote in a note Thursday. The Dow lost 125.98 points, or 0.5 percent, to 25,191.43.
The Dow Jones Industrial Average is 6.83 percent down from its all-time closing high and the Nasdaq 9 percent.
The expectation the Fed will continue to raise interest rates also has buffeted stocks this month, alongside anxiety over the fallout from the murder of Saudi Arabian journalist Jamal Khashoggi and an ongoing budget dispute between Italy and Brussels.
The Dow Jones Industrial Average dropped more than 300 points in early trading, pulled down by big drops in Caterpillar and 3M.
That reignited worries over the impact of rising borrowing costs, wages and tariffs on corporate profits and caused S&P industrial stocks to slide 2.24 percent.
United Parcel Service slid 5.5 percent to $107.93 after the shipping company reported weak worldwide revenue, while the strong dollar and high fuel prices also hurt its results.
Truck maker Paccar fell 5 percent to $57.45, while engine manufacturer Cummins slid 3.4 percent to $135.12.
Bond prices rose, sending yields lower, as investors sought out safer investments.
The falls on Wall Street came after official figures showed United States home sales fell to their slowest pace in almost two years, and a Federal Reserve report indicated that companies across America were concerned about the impact of tariffs and widespread labour shortages.
An equities rout that wiped out this year's gains for USA stocks spread to Asia today as concerns mounted that corporate profits and economic growth are peaking amid rising borrowing costs. It rose 1.3 percent to $354.65 after the defense contractor's latest quarterly results topped analysts' forecasts. Halliburton dropped 3.3 percent to $35.21. Brent crude fell 69 cents to $75.48 a barrel, while United States crude dropped 54 cents to $66.28. Even the high-flying dollar eased to 111.85 yen. It's shares rose 1.4%. Copper was little changed at $2.76 a pound. Britain's FTSE 100 inched up 0.1 percent. The Nasdaq slipped 31 points, or 0.4 percent, to 7,437.
Canada's main stock index suffered its biggest one-day percentage drop since September 2015 on Wednesday on weak investor sentiment after Bank of Canada raised benchmark interest rate.
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