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Toxic factors slam stocks in one of worst trading days of year

Trader on the floor of the New York Stock Exchange.
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Stocks plunged in one of the worst trading days of the year as markets reacted to headlines on China and Russia, while weighing the potential impact of higher U.S. rates and the rising dollar.

Bonds rallied against a swift drop in stocks, and dollar traders said a Wall Street Journal report on changes in the leadership of China's central bank added an edge of uncertainty, leading to selling in risk assets and further firming of the greenback and Treasurys.

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After a bounce back Wednesday, stocks sank and the S&P 500 dropped more than a percent, while the Dow lost more than 200 points in the worst trading day since late July. Stocks have also been primed for a sell off with triple-digit losses in the Dow on Monday and Tuesday.

The , viewed as an early warning for overall market weakness, fell 1.5 percent Thursday to 1,110 and was down 4.2 percent on the week.