Much of the major thrust stemmed from renewed worries about market credit much of which involved European problems.

The Dow Jones industrial average had its second worst day of the year, dropping 387.18 points, or 2.83 percent, at 13, 270.68, The Nasdaq composite was down 56.49,or 2.16 percent, at 2,556.49 and the Standard & Poor 500 was down 44.40, or 2.96 percent, at 1,453.09.

The trading volume was 2.78 billion shares with 706 shares rising and 2,645 falling.

Oil prices fell amid expectations that economic weakness could weigh on demand, with the September-dated light crude contract down 56 cents to $71.59 a barrel, leaving it up 17% on the year. It has fallen four of the last five days.

Bonds rose. The benchmark 10-year note rose 24/32, or $7.50 for every $1,000 invested, to yield 4.766 percent Thursday. The 30-year bond gained 17/32 to yield 5.013%.

The dollar was mixed. The dollar was at 118.19 yen, from 119.69 yen Wednesday. The euro was at $1.3673 from $1.3797 late Wednesday.