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Stock Rout Continues, Dow Down Over 300 Points For Second Straight Day

U.S. stocks plunged on Friday, extending a recent rout, as concerns about slowing global growth continued to pressure investor sentiment.

"Right now there is a feeling of fear in the marketplace and all news is interpreted negatively and it's interpreted indiscriminately," said Tom Digenan, head of U.S. equities at UBS Global Asset Management.

The major averages accelerated selling in late morning trade to fall more than 1.5 percent. Earlier, the averages briefly attempted to halve losses in mid-morning trade.

Market's big sell-off 2:30

"I think uncertainty about China (and) general negativity is weighing on the market. There's a lack of positive economic news to motivate buyers," said David Kelly, chief global strategist at JPMorgan Funds. He noted "there's nothing particularly negative in the U.S. economic outlook."

The Dow Jones industrial average fell more than 300 points. The Nasdaq Composite lost more than 2 percent. The S&P 500 fell through support levels to below 2,000, off more than 2.5 percent for the year so far. And the Russell 2000 traded in correction territory.

Markets are in a technical mess

Peter Cardillo, chief market economist at Rockwell Global Capital, noted some volatility due to options expirations.

"At one point or another you're going to see some bottom fishing," he said.

Global markets also extended losses on Friday. European stocks were lower, with the STOXX Europe 600 off about 1.5 percent.

The Shanghai Composite plunged 4.2 percent after the China flash manufacturing PMI came in at a 6-1/2-year low.

"There's a lot of systemic fear with growth slowing in China ... but nobody really knows what the actual data is," said John Caruso, senior market strategist at RJO Futures. "With China taking the drastic measure of actually devaluing their currency (last week) many people are believing things are much worse than they're leading us on to believe."

Latest China News from NBC News

On the other hand, euro zone activity rose in August. The regional flash composite PMI from Markit rose to 54.1 from 53.9 in July. The U.S. flash manufacturing PMI came in at 52.9, slightly below expectations.

"I'd certainly be surprised if there's not a bit of a bounce, because a lot of what we know is not new," said Art Hogan, chief market strategist at Wunderlich Securities.

Oil reversed Thursday's late gains to trade lower, with crude oil off more than 2 percent to near $40 a barrel. Brent crude briefly fell below $46 a barrel.

Treasury yields held lower, with the 10-year note yield at 2.08 percent and the 2-year yield at 0.65 percent.

The dollar was mixed, with the euro higher above $1.13 and emerging market currencies weaker.

Growth fears and uncertainty about the timing of a Federal Reserve rate hike weighed heavily on Thursday. U.S. stocks plunged more than 2 percent, with the major averages closing at session lows below their 200-day moving averages. The Dow fell 358 points to below 17,000 and the S&P 500 ended at 2,035, in the red for the year so far.

CNBC's Peter Schacknow contributed to this report