Stocks wiped out the previous day's rally yesterday as disappointing results from companies such as Pfizer renewed concern that earnings growth is slowing.
Energy shares such as Exxon Mobil, the market's top performers this year, led the retreat as oil prices briefly fell below $60 a barrel for the first time since July.
"A lot of people are guiding to the lower end of analysts' expectations for the fourth quarter," said Paul Gulden, who oversees $500 million as chief investment officer at H.G. Wellington Capital Management in New York. "In that environment, it's going to be difficult for stocks to move up tremendously."
The Dow Jones industrial average dropped 133.03, or 1.3 percent, to 10,281.10 a day after jumping 128.87 points. The last time it followed a 100-point gain with a 100-point loss was in March 2004.
The Standard & Poor's 500-stock index fell 17.96, or 1.5 percent, to 1177.80. The Nasdaq composite index decreased 23.13, or 1.1 percent, to 2068.11.
A Conference Board report showed the third straight drop in leading economic indicators, which measures the likely performance of the U.S. economy in the next three to six months. The gauge fell 0.7 percent in September after declining 0.1 percent in August.
Pfizer, the world's biggest drugmaker, fell $2.07, to $21.90. The company cut its 2005 per-share profit forecast and reported third-quarter sales that trailed analysts' estimates.
Eli Lilly & Co. slipped 35 cents, to $51.25, even after the maker of Zyprexa reported better-than-expected third-quarter profit. Pharmaceutical and biotechnology stocks fell 2.8 percent, for the second-worst performance among 24 industries in the S&P 500.
Chevron fell $2.59, to $55.75. A gauge of energy shares slumped 4.1 percent, for the biggest drop in the S&P 500, and is on pace for its worst monthly performance since at least 1989. Exxon Mobil fell $1.97, to $55.20, and Valero Energy slid $6.03, to $92.95.
Coca-Cola gained 30 cents, to $42.10, after reporting profit that exceeded analysts' estimates.
United Parcel Service gained $1.61, to $72.44. The shipping giant said quarterly profit rose 7.1 percent.
New York Stock Exchange composite index fell 128.98, to 7234.09.
American Stock Exchange index fell 39.24, to 1576.79.
Russell 2000 index of smaller-company stocks fell 10.74, to 627.54.
NYSE: 2.64 billion shares, down from 2.69 billion on Wednesday. Decliners outnumbered advancers
3 to 1.
Nasdaq: 1.83 billion shares, down from 1.92 billion. Decliners outnumbered advancers 2 to 1.
Crude oil for November delivery: $61.03, down $1.38.
Gold for current delivery: $461.00 a troy ounce, down from $463.50 on Wednesday.