U.S. stocks tumbled the most in a week, sending the blue-chip index more than 100 points into the red and the tech-heavy Nasdaq was dragged down by disappointing news from Oracle and Google.
The Dow Jones Industrial Average fell 120.40 points, or 0.97 percent to 12302.46, the Standard & Poor's 500 index dropped 15.37 points, or 1.15 percent to 1325.76 and the Nasdaq Composite Index slipped 43.53 points, or 1.87 percent, to 2280.83.
Traders sold shares of financials on more write down fears, especially about Lehman Brothers. Tech stocks took a big hit today Oracle Corp., the world's third-largest software company, tumbled the most since November after revenue trailed analysts' estimates.
The market opened the day higher after the government said personal spending, which amounts to more than two-thirds of the economy, rose at a 2.3 percent annual rate in the fourth quarter and jobless claims unexpectedly decreased last week.
Financials and brokerages took a beating as a Lehman Brothers analyst cut estimates on Citibank, Bank of America , UBS and other large-cap banks. An Oppenheimer & Co. and a Punk, Ziegel & Co. analyst also reduced estimates for Merrill Lynch & Co.
Crude oil settled up $1.68 to $107.58, gold for April delivery settled down 40 cents to $948.80 an ounce, while the dollar rose versus the euro and the yen.