The Dow Jones industrial average closed down 53.76 at 3,200.61 after falling as low as 3,198.99 on heavy program selling.
'Everyone was trying to get out of the way here,' said Ron Doran, of CL King and Associates. 'It was an ugly day.'
The Dow's loss was the biggest since a 61.94-point decline on April 7.
Robert Walberg, an analyst at MMS International, predicted that the Dow would test the 3,160 level next week unless the Fed eased rates.
'The economy is soft and earnings are not going to be as strong as anticipated.'
Gerald Simmons, of Interstate/Johnson Lane, said a lack of interest rather than heavy selling knocked shares lower.
'The market is just demoralised,' he said.Reuse content