The stock slump at day's end marked an opposite to the pattern seen on Tuesday, when traders chipped away at a steep slide by the close and the major indexes ended little changed.
The slide in stocks has rattled investors still shaken by the market's plunge in late 2008 and early 2009.
"Everyone is so scared from what happened back in the big crash and now they're just all gun-shy," said Frank Ingarra, co-portfolio manager at Hennessy Funds.
U.S. manufacturing has been strong throughout the recovery. April's figures were boosted by a big rise in transportation orders. Excluding transportation, orders fell 1 percent.
SHOOT: Transportation rose because oil prices are low. That's the only happy pixel in the unhappy econicon. Energy pricves hold sway - if economies rise, energy prices respond and will kill gains. Then the process repeats, but the point is, economic growth is over, because energy growth is history.
The Dow fell 69.30, or 0.7 percent, to 9,974.45. It was the first close below 10,000 since Feb. 8