U.S. stocks fell, sending indexes to their steepest one-day loss in three weeks.
Cisco Systems said sales may decline this quarter, triggering a slide in computer-related shares.
The Dow Jones industrial average slid 184.77, or 2.1 percent, to 8586.24, and the Nasdaq composite index dropped 42.28, or 3 percent, to 1376.71. The Standard & Poor's 500-stock index fell 21.11, or 2.3 percent, to 902.65.
Stocks extended their slide in the afternoon as President Bush said Iraqi President Saddam Hussein faced "serious consequences" if he didn't permit unfettered arms inspections.
Cisco fell 61 cents, to $12.35. The biggest maker of equipment to link computers said sales in the quarter ending Jan. 25 may fall as much as 4 percent from the first quarter.
Cisco's outlook dimmed the prospects for makers of programmable computer chips such as Xilinx and Altera, said Wachovia Securities analyst Karl Motey.
Xilinx fell $3.82, to $19.09. Altera fell $1.87, to $11.33.
Among other computer-related companies, IBM, the biggest computer maker, fell $2.59, to $78.95. Microsoft fell 94 cents, to $56.09. Juniper Networks, a Cisco rival, fell 51 cents, to $7.18.
Intel fell 76 cents, to $18.39. Worldwide semiconductor sales will rise 1.8 percent in 2002, short of the 3.1 percent forecast earlier, according to the Semiconductor Industry Association.
Citigroup, the world's biggest financial services company, fell $1.44, to $36.45. Bank of America fell $2.65, to $67.44.
Banks won't be able to reduce what they pay out in interest by the same amount that they have lowered what they are charging borrowers, Goldman analyst Lori Appelbaum said.
J.P. Morgan Chase tumbled $1.46, or 6.6 percent, to $20.60, on speculation that it suffered unspecified losses on gold trades.
"The rumors are false and irresponsible," said J.P. Morgan spokesman Joseph Evangelisti.
Costco fell $1.64, to $32.07, after cutting its fiscal first-quarter earnings forecast because of slowing sales.
The retailer said it expects to earn 30 to 32 cents a share, below its previous forecast for 32 to 33 cents.
Michaels Stores tumbled $10.78, or 24 percent, to $34.90. The arts-and-crafts retailer said full-year profit will be less than forecast.
* The New York Stock Exchange composite index fell 9.72, to 480.39; the American Stock Exchange index fell 7.78, to 827.18; and the Russell 2000 index of smaller-company stocks fell 9.58, to 383.15.
* Declining issues outnumbered advancing ones by about 2 to 1 on the NYSE and the Nasdaq. NYSE trading volume fell to 1.48 billion shares, from 1.67 billion on Wednesday, and Nasdaq volume totaled 1.71 billion, down from 2.07 billion.
* The price of the Treasury's 10-year note rose $11.56 per $1,000 invested; its yield fell to 3.87 percent, from 4.03 percent on Wednesday.
* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 121.29 yen, down from 121.78 late Wednesday, and a euro bought $1.0088, up from $1.0029.
* Light, sweet crude oil for December delivery settled at $25.38 a barrel, down 39 cents, on the New York Mercantile Exchange.
* Gold for current delivery rose to $320.50 a troy ounce, from $317.50 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.