Slaughter on Wall Street

Nearly 4 billion shares changed hands on the NYSE, where decliners outpaced advancers by a 7-to-1 margin. On the Nasdaq, volume reached 3.13 billion shares, and losers trampled winners 14 to 1.

On the Dow, all of its 30 components finished in the red, led by 5% or greater drops in Disney (DIS Quote), General Motors (GM Quote) and Procter & Gamble (PG Quote).

"The market has been stretched for the last three months, and there's been lots of speculation," said Phillip Roth, chief technical market analyst with Miller Tabak. "It's been destined to crack, but no one knew which trigger would do it."

The tech-laden Nasdaq was pressured by losses in Apple (AAPL Quote), Intel (INTC Quote), Cisco (CSCO Quote), Sun Microsystems (SUNW Quote) and Microsoft (MSFT Quote).

Yields on Treasuries and the dollar dropped for the session. The 10-year Treasury jumped 30/32 in price to yield 4.51%, and the 30-year bond surged 1 23/32 to yield 4.62%. The greenback extended its losses against the euro and the yen.

"Toward the end of the day, there was a flight-to-safety bid to Treasuries as the market crumbled," said John Canavan, market analyst with Stone & McCarthy Research Associates. "There's more liquidity and more safety for investors."

Before the session began, the Commerce Department said durable-goods orders dropped 7.8% in January, more than twice as wide as the expected 3% decline. Excluding transportation, orders were down 3.1% for the month.