Stocks tumbled on Thursday amid concerns that events surrounding Ukraine are escalating and that China's slowing growth will rub off on the global economy and bite into corporate profits.
The Dow Jones Industrial Average suffered its worst day since Feb 3, ending the day down 231 points or 1.4 percent at 16,108.89. The S&P 500 lost 21 points, or 1.17 percent and the Nasdaq was 62 points, or 1.46 percent in the red.
A sense that tensions are rising around the Ukraine situation sent a shudder through markets. In addition to the Dow's swoon, the German DAX was down nearly 2 percent.
Secretary of State John Kerry said a "serious series of steps" would be imposed by the U.S. and Europe on Monday if the referendum in Crimea takes place on Sunday as planned. Russia meanwhile launched new military exercises near its border and reports circulated of shots being fired at aircraft.
"We don't have panic selling here," said one stock trader. "We're getting a lot of panic questions."
Concerns about China are two pronged. A recent report showed that February exports—a major engine for its economy—fell 18.1 percent from a year earlier. There are also worries about the country's financial system, and those concerns intensified last week when Shanghai Chaori Solar defaulted on its debt, the first ever in China.
Reuters cited banking and industry sources in reporting increasing concerns about the financial health of bloated industries in China have caused many banks to reduce lending in these sectors up to 20 percent.
"It's a little bit of a return of flight to quality. There are headlines about Russia from Kerry and the Ukraine president and just the general sense that things are going to get worse before they improve," said Ian Lyngen, senior Treasury strategist at CRT Capital.
The 10-year yield slumped to 2.66 percent, as buyers moved into Treasurys. The dollar index firmed, and gained further after the euro pulled back after comments from European Central Bank President Mario Draghi that the ECB has been preparing additional stimulus.
"China is a worry but for today it's about a 10 percent worry," said Art Cashin, director of floor operations at UBS. More weak retail and industrial production data from China overnight fed concerns about growth in the world's second biggest economy, and worries increased when news reports circulated later that China was scaling back some business lending by as much as 20 percent.
Copper fell another 1.5 percent Thursday. Since copper is used for collateral for Chinese bank loans, the concern is that more of the metal could flood the market if there are further defaults.
The CBOE Volatility Index, a measure of investor uncertainty, gained 12 percent to 16.18.
"Since the beginning of March, the action has been poor all around. We're in a bit of a vacuum, and will probably have to wait until earnings season to get a boost," said Dan Greenhaus, chief global strategist at BTIG.
Ever since the spike in late February, the market has been trending lower. "I'm not sure there's any theme to that, we're just in a general malaise, after a pretty good recovery from the EM (emerging market) action," Greenhaus added.
For every stock rising, more than two fell on the New York Stock Exchange, where 692 million shares traded. Composite volume approached 3.6 billion.
On the New York Mercantile Exchange, gold futures for April delivery rose $1.90, or 0.1 percent, to $1,372.40 an ounce; crude-oil futures for April delivery rose 21 cents, or 0.2 percent, to $98.20 a barrel.
Before the market opened, there was positive economic news. The Commerce Department reported retail sales gained 0.3 percent in February after a 0.6 percent decline the prior month, with the latter figure bigger than initially estimated.
Another report, this one from the Labor Department, had application for jobless benefits unexpectedly declining last week, by 9,000 to 315,000.
A third economic report Thursday had business inventories rising 0.4 percent in January, in line with expectations.
- CNBC's Kate Gibson contributed to this report.