Updated from 4:05 p.m. EDT

Stocks plunged Thursday, erasing the previous day's rally, as a sharp fall in crude prices ripped energy shares and the broader market coped with spotty earnings.

The Dow Jones Industrial Average tumbled 133.03 points, or 1.28%, to 10,281.10, the worst single-session point loss since June 23. The S&P 500 shed 17.96 points, or 1.5%, to 1177.80 while the Nasdaq Composite fell 23.13 points, or 1.11%, to 2068.11.

"With lower energy and no follow-through, the market just rolled over," said Jay Suskind, head of institutional equity trading with Ryan Beck. "There's still the same headwinds, with higher inflation fears, as well as fourth-quarter earnings concerns."

Another factor for stocks was the Philadelphia Federal Reserve's report on regional manufacturing activity, which showed healthy expansion but saw a pricing gauge spike to its highest level since 1980. Higher prices for manufactured goods were more widespread, suggesting costs are being passed on to consumers.

Twenty-three of the 30 Dow components fell, led by Pfizer ( PFE), which lost 8.6%; McDonald's ( MCD), which lost 3.8%; ExxonMobil ( XOM), which fell 3.5%; and American Express ( AXP), which lost 3.3%.

After a rousing bounce Wednesday, stocks fell back to earth just as fast. Energy shares were among the biggest losers as crude's flirtation with $60 a barrel sparked valuation concerns in the sector. The Philadelphia Stock Exchange Oil Service index finished down 2.8%, while the Amex Oil Index tumbled 4.7%.

"It's actually a healthy correction for the oil stocks," said Dave Briggs, head of equity trading with Federated. "It's creating a great buying opportunity."

Oil was taken down by a bearish report on natural gas inventories. On Nymex, crude for November delivery lost $1.38 to $61.03 a barrel, the lowest close since the end of July. The contract dipped below $60 earlier in the session. Part of the plunge also reflected Hurricane Wilma, which continued to move away from Gulf of Mexico energy infrastructure.

"People like to worry in October, when we hear about how high energy prices will cancel Christmas," said Briggs. "The commodity itself has come off its peak after the hurricanes. We built up the price on demand and now that demand is slacking."

Banks and chain stores, both of which led Wednesday's 1.5% rally on the S&P 500, turned negative at midafternoon and finished lower.

"There's a lot of talk that yesterday's move was a bear trap that didn't convince people," said Suskind.

In other markets, the 10-year Treasury was up 3/32 in price to yield 4.45%, while the dollar hovered against the yen and euro.

About 1.93 billion shares traded on the New York Stock Exchange, with decliners beating advancers by a 3-to-1 margin. Trading volume on the Nasdaq was 1.81 billion shares, with advancers outpacing decliners 2 to 1.

eBay ( EBAY) was rocked after saying fourth-quarter earnings will total 21 cents a share before items, about a penny shy of estimates. The outlook came in an otherwise solid third-quarter release in which the online auctioneer posted a 40% year-over-year rise in profits and a 37% jump in sales. eBay finished lower by $2.86, or 6.8%, to $39.15.

Peter Cardillo, chief market analyst with S.W. Bach & Co, says that as earnings continue to pour in, "we're seeing meek fourth-quarter outlooks even as this quarter's reports are coming in good."

Elsewhere in tech, Nokia ( NOK) said third-quarter net rose 29% from a year ago to $1.06 billion, beating estimates. The mobile-phone company also reported an 18% rise in sales to $10.08 billion and said its unit volume should grow in the fourth quarter at a faster rate than the rest of the industry. Still, the shares lost about 6% as invetors worried about Nokia's pricing power in less-developed countries. Nokia lost $1.15, or 6.7%, to $15.90.

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