Stocks fell sharply Friday, with volatility expected to remain high due to the expiration of options, oil prices continuing their climb and bank worries slamming the financial sector.
The Dow Jones Industrial Average tumbled more than 100 points, pushing the blue-chip index well below the key 12000 mark.
All three major indexes -- the Dow, S&P 500 and Nasdaq -- were off more than 1 percent.
Adding to the volatility today is quadruple witching -- when contracts for stock index futures, stock index options, stock options and single stock futures expire in the same day -- which could bring some wild swings toward the end of the day.
Financials were the biggest decliner, falling 3 percent, amid a swirl of dismal news.
Rumors of a profit warning from Merrill Lynch sent a ripple through the market. Merrill has refused to comment on the speculation but sources tell CNBC the rumors aren't true. Still, the stock dropped about 5 percent.
Regional banks have had a brutal week, with several cutting dividends and announcing plans to raise more capital to stay afloat.
Large-cap regional bank stocks are now in "capitulation mode" and will likely trade below fair value in the near term, said Merrill Lynch analyst Edward Najarian. The analyst cut his earnings estimates by an average 22 percent and 19 percent for 2008 and 2009, respectively. He also expects more banks to cut dividends and raise capital in the second half, including Bank of America and Wachovia .