Routed by weakening corporate profits and rocketing crude oil prices, stocks retreated en mass today, handing investors their worst loss in a month.
The Dow Jones industrial average fell 136 points to 10,109.18.
The Nasdaq Stock Market composite dropped 35 points to 1,885.71.
The Standard & Poor's 500 stock index retreated almost 16 points to 1,113.56.
More than 90 percent of the S&P 500 stocks and all 30 of the Dow Jones industrials were down for the day as investors wrote a laundry list of reasons for selling.
Today's sell-off came the day after the S&P and the Nasdaq composite hit their highest levels in two months -- a target that gave short-term traders a rationalization for cashing in the gains they have recorded in the past few weeks.
Also encouraging traders to take profits are the growing number of corporations that have served notice that sales or profits -- or both -- are slowing down. Today Morgan Stanley became the latest big name to warn that earnings are coming up short of expectations, joining Coca-Cola, Colgate-Palmolive, Unilever and Wendy's.
Wendy's share plunged after its warning, but the stock of McDonald's dropped even more, and Morgan Stanley's warning produced a broad decline in financial services stocks. The pattern now is that when one company in an industry exposes weakness, traders tend to sell the entire sector rather than try to sort out the winners and losers.
The markets are also reflecting the aftereffects of this season's killer hurricanes, which Wendy's said have disrupted business in the southern United States so badly that corporate profits will be pinched.
The latest storm, Hurricane Ivan, did more damage to oil production in the Gulf of Mexico than previously reported and was one of the factors cited in today's rebound in crude oil prices, which jumped $1.64 a barrel to $48.40.
At the close of today's trading on the New York Mercantile Exchange, crude oil futures were just $1 below the all-time high they hit in early August. Government reports showed domestic stocks of oil fell for the eighth week in a row, the longest decline since 1988. The reports said Ivan destroyed at least seven offshore oil platforms, contributing to the tightening of supplies.