3 February 2014
Last updated at 16:52 ET
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The Dow Jones and S&P 500 indexes both ended more than 2%, while the tech-rich Nasdaq fell 2.6%.
A report showed that US manufacturing barely grew last month, while signs of weakness in China's manufacturing added to worries about developing economies.
Many analysts have predicted that fast-rising markets are due a correction.
"This is the beginning of the correction that we have been waiting for," said Peter Cardillo, chief market economist at Rockwell Global Capital.
Scott Wren, senior equity strategist, said a correction was inevitable after the way investors drove up prices during 2013.
"We're in a modest-growth, modest-inflation environment," he said. "People got carried away with a perceived acceleration of the economy."
After a lacklustre start to trading on Monday, the Dow Jones finished down 326 points at 15,372.8.
The broader-based S&P 500 fell 40.70 to 1,741.89 points, and the Nasdaq ended down 106.92 points at 3,996.96.
General Motors fell 2.3% after January US vehicle sales tumbled 12%, while Ford declined 2.7% after its January sales dropped 7%.
Telecommunications stocks also sank, with AT&T down 4.1%. and Verizon 3.4% lower.
Wall Street Market Report
Continue reading the main story |
London | Paris | Frankfurt | Tokyo | Wall Street | |
Dow Jones Industrial Average
Last Updated at 03 Feb 2014, 16:03 ET *Chart shows local time| value | change | % |
|---|---|---|
| 15372.80 |
-
-326.05
|
-
-2.08
|
Top winner and loser |
||
Pfizer Inc. |
||
| 30.60 |
+
+0.20
|
+
+0.66
|
AT&T Inc. |
||
| 31.95 |
-
-1.37
|
-
-4.11
|
(Close):
US shares fell sharply, with investors unnerved by weak US factory data
and continuing worries about slower growth in emerging economies.
A report showed that US manufacturing barely grew last month, while signs of weakness in China's manufacturing added to worries about developing economies.
Many analysts have predicted that fast-rising markets are due a correction.
"This is the beginning of the correction that we have been waiting for," said Peter Cardillo, chief market economist at Rockwell Global Capital.
Scott Wren, senior equity strategist, said a correction was inevitable after the way investors drove up prices during 2013.
"We're in a modest-growth, modest-inflation environment," he said. "People got carried away with a perceived acceleration of the economy."
After a lacklustre start to trading on Monday, the Dow Jones finished down 326 points at 15,372.8.
The broader-based S&P 500 fell 40.70 to 1,741.89 points, and the Nasdaq ended down 106.92 points at 3,996.96.
General Motors fell 2.3% after January US vehicle sales tumbled 12%, while Ford declined 2.7% after its January sales dropped 7%.
Telecommunications stocks also sank, with AT&T down 4.1%. and Verizon 3.4% lower.
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