A weakness in durable goods orders at home and terrorism abroad thwarted an end-of-year rally in US markets, which finished lower.
Major US market indexes fell more than 1 percent each after Pakistani opposition leader Benazir Bhutto was assassinated and separate reports raised new questions about the economy. Troubled financial companies led the move downward, but losses were widespread.
The combination of bad news was too much for a market that had shown signs of strength in the past several trading days.
The Dow Jones industrial average sank 192.08 points, or 1.42 percent, to end at 13,359.61. The Standard & Poor's 500 Index slid 21.39 points, or 1.43 percent, to 1,476.27. The Nasdaq Composite Index tumbled 47.62 points, or 1.75 percent, to 2,676.79.
"Whenever this type of news comes out, whether its poor economic reports or rumors about more writedowns and dividend cuts, the market seems to sell off," said Todd Salamone, of Schaeffer's Investment Research.
Analysts differed, though, on how long the sell-off would last, particularly as it concerned the Bhutto murder. The former prime minister was killed in a gun and bomb attackafter a rally in the city of Rawalpindi on Thursday.
"A lot of people have unknowns like that built in via portfolio insurance and index puts," Salamone said. "They're less apt to panic. That doesn't mean the market won't sell off in the short term."
Reactions in the markets indeed appeared to be driven as much by the economic dataas the Bhutto assassination. Various reports showed new orders for durable goods falling below forecasts and applications for jobless benefits up, though consumer confidence gained as well.