The Dow industrials took a plunge as lingering Asian economic woes and concern over the Korean election contributed to lower expectations for corporate profits.
On Wall Street, the Dow dropped 100.91 points to close at 7,846.50.
Analysts blamed disappointing earnings forecasts and ominous signs of trouble in foreign markets for the descent, which continued the previous session's decline.
Declines outnumbered advancers by about two-to-one on the New York Stock Exchange, with 1,065 up, 1,922 down and 490 unchanged.
NYSE volume totalled 614.88 million shares as of 4pm, against 616.81 million in the previous session.
The Standard and Poor's 500-stock list fell 9.03 to 956.51, and the NYSE composite index slipped 4.90 to 501.69.
The Nasdaq composite index dropped 24.21 points to 1,523.17, and the American Stock Exchange index dipped 6.41 to 664.87.
