The latest reminder of how the economy has slowed came from the Labor Department, which reported new claims for state unemployment insurance shot up last week to a nine-year high, an indication that employers' need for workers is still waning.
Declining issues narrowly outnumbered advancers 8 to 7 on the New York Stock Exchange where volume was 691.88 million shares, compared with 688.70 million at the same point Wednesday.
Stocks slid Wednesday after J.P.Morgan Chase and Hewlett-Packard became the latest blue-chip giants to warn the slumping economy is hurting revenues.
Financial services heavyweight J.P. Morgan Chase said it expects lower trading revenues in the quarters ahead, while leading computer maker H-P warned the slowdown in information technology was becoming global, eroding some hopes for a smooth recovery in the tech industry.
The Dow Jones industrial average fell 105.60 points, or 0.94 percent, to 11,070.24, dragged down by financial services and tech shares. The declines in the shares of H-P and J.P. Morgan Chase contributed 19 points, or about 20 percent, to the Dow's drop.
The broader Standard & Poor's 500 Index lost 13.54 points, or 1.05 percent, to 1,270.03, as declines in oil stocks weighed on the benchmark index.