Updated from 4:09 p.m. EST

Stocks in New York sank Thursday as strong earnings from eBay ( EBAY) and Qualcomm ( QCOM) couldn't stop a data-driven selloff from erasing the previous session's gains.

The Nasdaq Composite gave up 32.04 points, or 1.3%, to 2434.24. The Dow Jones Industrial Average slumped 119.21 points, or 0.94%, at 12,502.56, and the S&P 500 was off 16.23 points, or 1.13%, at 1423.90.

The major indices took a southern detour early in the session after a report on existing-home sales. The National Association of Realtors said home sales fell 0.8% to 6.22 million annualized units in December, below estimates of 6.25 million annualized units. Following the data, the Philadelphia Stock Exchange Housing Sector index fell 2.3%.

Also contributing to the decline was a 2.1% fall in the Amex Oil index and a 2.6% slump in the Philadelphia Oil Service Sector index.

Roughly 3.19 billion shares changed hands on the New York Stock Exchange, and volume on the Nasdaq topped 2.25 billion shares. Decliners beat advancers roughly 3-to-1.

"Jittery investors were quick to take profits when the market rolled over today," said Michael Sheldon, chief market strategist with Spencer Clarke. "It'll be interesting to see, over the near term, how the market responds to a damaging day like this. We could see investors becoming more defensive."

Wall Street was coming off a day in which the major averages rallied, a climb that was spearheaded by gains in Sun Microsystems ( SUNW) and Yahoo! ( YHOO). The Nasdaq surged 34.87 points, or 1.43%, to 2466.28, and the Dow rose 87.97 points, or 0.7%, to 12,621.77, a record high finish.

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